- 1
- The Netherlands may include in the basis upon which taxes are imposed on its residents, the items of income which according to the provisions of this Convention may be taxed in Bulgaria. In such cases, however, the Netherlands shall allow a reduction or deduction from the Netherlands tax according to the provisions of paragraphs 2, 3, 4, and 5, except to the extent that the provisions of this Convention allow taxation by Bulgaria solely because the items of income are also income derived by a resident of Bulgaria.
- 2
- Where a resident of the Netherlands derives items of income which according to paragraphs 1, 3 and 4 of Article 6, paragraph 1 of Article 7, paragraph 8 of Article 10, paragraph 5 of Article 11, paragraph 4 of Article 12, paragraphs 1, 2 and 4 of Article 13, paragraph 1 of Article 14, paragraphs 1 and 2 of Article 17, paragraph 1 (subparagraph a)) of Article 18 and paragraph 2 of Article 21 of this Convention may be taxed in Bulgaria 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 the Netherlands law for the elimination 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
- The provisions of paragraph 2 shall not apply to items of income derived by a resident of the Netherlands where Bulgaria applies the provisions of this Convention to exempt such items of income from tax or applies the provisions of paragraph 2 or 3 of Article 10 or paragraph 2 of Article 11 or paragraph 2 of Article 12 to such items of income. In such case, the provisions of paragraph 4 shall apply accordingly.
- 4
- Further, the Netherlands shall allow a deduction from the Netherlands tax so computed for the items of income which according to
- paragraphs 2 and 10 of Article 10, paragraph 2 of Article 11, paragraph 2 of Article 12, paragraph 6 of Article 13, Article 15, paragraphs 1 and 2 of Article 16 and paragraph 5 of Article 17 of this Convention may be taxed in Bulgaria 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 Bulgaria on these items of income, but shall, in case the provisions of the Netherlands law for the elimination 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 for which the Netherlands gives a deduction under the provisions of the Netherlands law for the elimination of double taxation.
- This paragraph shall not restrict allowance now or hereafter accorded by the provisions of the Netherlands law for the elimination of double taxation, but only as far as the calculation of the amount of the reduction 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 Bulgaria on the said items of income to subsequent years.
- 5
- Notwithstanding the provisions of paragraph 2 and 3, the Netherlands shall allow a deduction from the Netherlands tax for the tax paid in Bulgaria on items of income which according to paragraph 1 of Article 7, paragraph 8 of Article 10, paragraph 5 of Article 11, paragraph 4 of Article 12, paragraph 4 of Article 13 and paragraph 2 of Article 21 of this Convention may be taxed in Bulgaria to the extent that these items are included in the basis referred to in paragraph 1, insofar as the Netherlands under the provisions of the Netherlands law for the elimination 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 4 of this Article shall apply accordingly.
- 6
- In Bulgaria double taxation shall be eliminated as follows:
-
- a)where a resident of Bulgaria derives income which, in accordance with the provisions of this Convention, including in the case of Article 13, paragraph 6, may be taxed in the Netherlands, Bulgaria shall allow as a deduction from the tax on the income of that resident, an amount equal to the tax on the income paid in the Netherlands. Such deduction shall not, however, exceed that part of the income tax, as computed before the deduction is given, which is attributable to the income which may be taxed in the Netherlands;
- b)where in accordance with any provision of this Convention income derived by a resident of Bulgaria is exempt from tax in Bulgaria, Bulgaria may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income.
