- 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 or shall be taxable only in Ireland.
- 2
- However, 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 7 of Article 10, paragraph 3 of Article 11, paragraph 3 of Article 12, paragraphs 1, 2 and 4 of Article 13, paragraph 1 of Article 14, paragraph 2 of Article 17, paragraphs 1, subparagraph a), and 2, subparagraph a), of Article 18, and paragraph 2 of Article 20 of the Convention and Article III of the Protocol to the Convention may be taxed or shall be taxable only in Ireland 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
- Further, the Netherlands shall allow a deduction from the Netherlands tax so computed for the items of income which according to paragraphs 2 and 9 of Article 10, paragraph 6 of Article 13, the provisions of Article 15, paragraphs 1 and 2 of Article 16 and paragraph 3 of Article 17 of the Convention may be taxed in Ireland 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 Ireland on these items of income, but shall, in case the provisions of the Netherlands law for the elimination of double taxation so provide 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 avoidance 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 deduction from 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 Ireland 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 Ireland on items of income which according to paragraph 1 of Article 7, paragraph 7 of Article 10, paragraph 3 of Article 11, paragraph 3 of Article 12, paragraph 4 of Article 13 and paragraph 2 of Article 20 of the Convention may be taxed in Ireland 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 jurisdiction on such items of income. For the computation of this deduction the provisions of paragraph 3 of this Article shall apply accordingly.
- 5
- The provisions of paragraph 2 shall not apply to items of income derived by a resident of a Contracting State where the other Contracting State applies the provisions of this Convention to exempt such income from tax.
- 6
- In Ireland, subject to the provisions of the laws of Ireland regarding the allowance as a credit against Irish tax of tax payable in a territory outside Ireland (which shall not affect the general principle hereof), double taxation shall be eliminated as follows:
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- a)Netherlands tax payable under the laws of the Netherlands and in accordance with the Convention, whether directly or by deduction, on profits, income or gains 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 Irish tax computed by reference to the same profits, income or gains by reference to which Netherlands tax is computed;
- b)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 Ireland and which controls directly or indirectly 5 per cent or more of the voting power in the company paying the dividend, the credit shall take into account (in addition to any Netherlands tax creditable under the provisions of subparagraph (a)) Netherlands tax payable by the company in respect of the profits out of which such dividend is paid.
- 7
- For the purposes of paragraph 6 profits, income and capital gains owned by a resident of Ireland which may be taxed or shall be taxable only in the Netherlands in accordance with the Convention shall be deemed to be derived from sources in the Netherlands.
- 8
- Where in accordance with any provision of the Convention income derived by a resident of Ireland is exempt from tax in Ireland, Ireland may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income.
