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Article 23 Elimination of Double Taxation

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Article 23 Elimination of Double Taxation

    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 Agreement, may be taxed in Nigeria.
    2
  • However, where a resident of the Netherlands derives items of income which according to Article 6, Article 7, paragraph 4 of Article 10, paragraph 5 of Article 11, paragraph 4 of Article 12, paragraphs 1 and 2 of Article 13, Article 14, Article 15, Article 16 and Article 19 of this Agreement may be taxed in Nigeria 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 corformity 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 2 of Article 11, paragraph 2 of Article 12, paragraph 4 of Article 13, Article 17, sub-paragraph a) of paragraph 1 and paragraph 2 of Article 18 and paragraph 2 of Article 22 of this Agreement may be taxed in Nigeria to the extent that these items are included in the basis referred to in paragraph 1 of this Article. The amount of this deduction shall be equal to the tax paid in Nigeria 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.
  • Where by reason of the relief given under the provisions of Nigerian laws for the purposes of encouraging investment in Nigeria the Nigerian tax actually levied on interest arising in Nigeria or on royalties arising in Nigeria is lower than the tax Nigeria may levy according to paragraph 2 of Article 11 and paragraph 2 of Article 12, respectively, then the amount of the tax paid in Nigeria on such interest and royalties shall be deemed to have been paid at the rates of tax mentioned in the said provisions.
  • However, if the general tax rates under Nigerian laws applicable to the afore-mentioned interest and royalties are reduced below those mentioned in this paragraph, these lower rates shall apply for the purposes of this paragraph.
  • The provisions of this paragraph shall only apply for a period of ten years after the date on which the Agreement became effective. This period may be extended by mutual agreement between the competent authorities.
    4
  • Subject to the provisions of the law of Nigeria regarding the allowance as a credit against Nigerian tax of tax payable in a territory outside Nigeria (which shall not affect the general principle hereof):
    • a)Netherlands tax payable under the laws of the Netherlands and in accordance with this Agreement, whether directly or by deduction, on profits, income or chargeable 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 Nigerian tax computed by reference to the same profits, income or chargeable 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 resident in Nigeria and which controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividend, the credit shall take into account (in addition to any Netherlands tax for which credit may be allowed under the provisions of subparagraph a) of this paragraph) the Netherlands tax payable by the company in respect of the profits out of which such dividend is paid.
  • For the purposes of this Article in determining the taxes on income paid to the Netherlands, the investment premiums and bonuses and desinvestment payments as meant in the Netherlands Investment Account Law ("Wet investeringsrekening") shall not be taken into account as they do not form part of the taxes referred to in paragraphs 1 a) and 2 of Article 2.

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