- 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 Denmark.
- 2
- However, where a resident of the Netherlands derives items of income which according to Article 6, Article 7, paragraph 6 of Article 10, paragraph 3 of Article 11, paragraph 3 of Article 12, paragraphs 1 and 2 of Article 13, Article 14, paragraph 1 of Article 15, paragraphs 1 and 2 of Article 18, paragraphs 1 (sub-paragraph a) and 2 (sub-paragraph a) of Article 19 and paragraph 2 of Article 21 of this Convention may be taxed in Denmark 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 total 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 5 of Article 13, Article 16, Article 17 and paragraph 6 of Article 18 of this Convention may be taxed in Denmark 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 Denmark on these items of income, but shall not exceed the amount of the reduction 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 state and the carry forward of the tax paid in Denmark 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 Denmark on items of income which according to Article 7, paragraph 6 of Article 10, paragraph 3 of Article 11, paragraph 3 of Article 12 and paragraph 2 of Article 21 of this Convention may be taxed in Denmark to the extent that these items are included in the basis referred to in paragraph 1, if and 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
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- a)Subject to the provisions of subparagraph c), where a resident of Denmark derives income which, in accordance with the provisions of this Convention, may be taxed in the Netherlands, Denmark shall allow as a deduction from the taxes on the income of that resident an amount equal to the taxes on income paid in the Netherlands.
- b)Such deduction in either case shall not, however, exceed that part of income tax, as computed before the deduction is given, which is attributable to the income which may be taxed in the Netherlands.
- c)Where a resident of Denmark derives income which, in accordance with the provisions of this Convention shall be taxable only in the Netherlands or may be taxed in the Netherlands in accordance with the provisions of article 15 and article 19, Denmark may include this income in the tax base, but shall allow as a deduction from the income tax that part of the income tax, which is attributable to the income derived from the Netherlands.
- d)Notwithstanding the provisions of sub-paragraph a) and b) of this paragraph, dividends paid by a company which is a resident of the Netherlands to a company which is a resident of Denmark shall be exempt from Danish tax according to the provisions of Danish law governing the exemption of tax on dividends paid to Danish companies by subsidiaries abroad.However, in the case where dividends do not qualify for the exemption from Danish tax, Denmark shall – in addition to the deduction from tax as mentioned in sub-paragraph a) and b) – allow as a deduction from the tax on such dividends the tax payable in respect of the profits out of which such dividends are paid in conformity with article 4 of the EC council directive of 23 July 1990 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States as it may be amended.
- e)In the case of an individual who was a resident of Denmark for a period of five years or more and has become resident of the Netherlands and under the national law of Denmark has been taxed in respect of capital gains on shares, up to the change of residence, then Denmark shall allow where the shares are subsequently alienated and the gains from such alienation are taxed in the Netherlands as a deduction from the tax on the income an amount equal to the income tax which is paid in the Netherlands with respect to the income which was taxed in Denmark.Such deduction shall not, however, exceed the income tax as computed before the deduction is given, which is levied on the said income in Denmark.
