- 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 or shall be taxable only in Cyprus. In such cases, however, the Netherlands shall allow a reduction of or deduction from the Netherlands tax according to the provisions of paragraphs 2, 3, 4, 5 and 6.
- 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 1 of Article 8, paragraph 6 of Article 10, paragraph 3 of Article 11, paragraph 3 of Article 12, paragraphs 1, 2 and 3 of Article 13, paragraph 1 of Article 14, paragraph 2 of Article 16, paragraph 1 (subparagraph a) and paragraph 2 (subparagraph a) of Article 17, paragraph 6 (subparagraph a) of Article 19 and paragraph 2 of Article 20 of this Convention may be taxed or shall be taxable only in Cyprus 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 Cyprus applies the provisions of this Convention to exempt such items of income from tax.
- 4
- Where a resident of the Netherlands derives items of income which according to paragraphs 2 and 8 of Article 10, paragraphs 4 and 5 of Article 13, paragraph 3 of Article 14, paragraph 1 of Article 15, paragraph 5 of Article 16, and paragraph 6 (subparagraph c) and paragraph 7 (subparagraphs a, b and c) of Article 19 of this Convention may be taxed or shall be taxable only in Cyprus, the Netherlands shall allow a deduction from its tax 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 Cyprus 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 reduction under the provisions of the Netherlands law for the elimination of double taxation.
- 5
- The provisions of paragraph 4 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 jurisdiction and the carry forward of the tax paid in Cyprus on the said items of income to subsequent years.
- 6
- Notwithstanding the provisions of paragraph 2, the Netherlands shall allow a deduction from the Netherlands tax for the tax paid in Cyprus on items of income which according to paragraph 1 of Article 7, paragraph 6 of Article 10, paragraph 3 of Article 11, paragraph 3 of Article 12 and paragraph 2 of Article 20 of this Convention may be taxed in Cyprus 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 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 reduction the provisions of paragraph 4 of this Article shall apply accordingly.
- 7
- In Cyprus, double taxation shall be eliminated as follows:
- Subject to the provisions of Cyprus Tax Law regarding credit for foreign tax, there shall be allowed as a credit against Cyprus tax payable in respect of any item of income derived from the Netherlands, the Netherlands tax paid under the laws of the Netherlands and in accordance with this Convention. The credit shall not, however, exceed that part of the Cyprus tax, as computed before the credit is given, which is appropriate to such items of income.
