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- In Chile, double taxation shall be avoided as follows:
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- a)residents in Chile, obtaining income or owning capital which has, in accordance with the provisions of this Convention, been subject to taxation in the Netherlands, may credit the tax so paid against any Chilean tax payable in respect of the same income or capital, subject to the applicable provisions of the law of Chile. This paragraph shall apply to all income or capital referred to in this Convention;
- b)where, in accordance with any provision of the Convention, income derived or capital owned by a resident of Chile is exempt from tax in Chile, Chile may nevertheless, in calculating the amount of tax on other income or capital, take into account the exempted income or capital.
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- The Netherlands, when imposing tax on its residents, may include in the basis upon which such taxes are imposed the items of income or capital which, according to the provisions of this Convention, may be taxed or shall be taxable only in Chile.
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- a)However, where a resident of the Netherlands derives items of income or owns items of capital which according to paragraphs 1, 3 and 4 of Article 6, paragraph 1 of Article 7, paragraph 7 of Article 10, paragraph 4 of Article 11, paragraph 4 of Article 12, paragraphs 1 and 2 of Article 13, paragraph 1 of Article 14, paragraph 1 of Article 15, paragraphs 1 and 2 of Article 18, paragraph 1 (subparagraph a) of Article 19, paragraph 2 of Article 21, and paragraphs 1, 2 and 3 of Article 22 of this Convention may be taxed or shall be taxable only in Chile and are included in the basis referred to in the first sentence of this paragraph, the Netherlands shall exempt such items of income or capital by allowing a reduction of its tax.This reduction shall be computed in conformity with the provisions of the Netherlands law for the avoidance of double taxation. For that purpose, the said items of income or capital shall be deemed to be included in the amount of the items of income or capital which are exempt from Netherlands tax under those provisions.
- b)Further, the Netherlands shall allow a reduction from the Netherlands tax so computed for the items of income which according to paragraph 6 of Article 7, paragraphs 2 and 9 of Article 10, paragraph 2 of Article 11, paragraph 2 of Article 12, paragraph 4 of Article 13, Article 16, paragraphs 1 and 2 of Article 17 and paragraphs 4 and 7 of Article 18 of this Convention may be taxed or shall be taxable only in Chile to the extent that these items are included in the basis referred to in the first sentence of this paragraph. The amount of this reduction shall be equal to the tax paid in Chile on these items of income, but shall, in case the provisions of the Netherlands law for the avoidance of double taxation provide so, not exceed the amount of the reduction which would be allowed if the items of income so included were the sole items for which the Netherlands gives a reduction under the provisions of the 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 reduction of Netherlands tax is concerned with respect to the aggregation of income from more than one jurisdiction and the carry forward of the tax paid in Chile on the said items of income to subsequent years.
- c)Notwithstanding the provisions of subparagraph a) of this paragraph, the Netherlands shall allow a reduction from the Netherlands tax for the tax paid in Chile on items of income which according to paragraph 1 of Article 7, paragraph 7 of Article 10, paragraph 4 of Article 11, paragraph 4 of Article 12 and paragraph 2 of Article 21 of this Convention may be taxed in Chile to the extent that these items are included in the basis referred to in the first sentence of this paragraph, insofar as the Netherlands under the provisions of the Netherlands law for the avoidance of double taxation allows a reduction from the Netherlands tax of the tax levied in another jurisdiction on such items of income. For the computation of this reduction the provisions of subparagraph b of this paragraph shall apply accordingly.
- d)The provisions of subparagraph a) shall not apply to items of income derived by a resident of the Netherlands where Chile applies the provisions of this Convention to exempt such items of income from tax or applies the provisions of Article 10, 11 and 12 to such items of income. In such case, the provisions of subparagraph b of this paragraph shall apply accordingly.
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- Where a resident of a Contracting State derives income or owns capital which may be taxed or shall be taxable only in the other Contracting State in accordance with the provisions of this Convention, the first-mentioned State shall not exempt such income or capital from tax, solely because the income or capital is also income derived or capital owned by a resident of that other State.
