DT13571 - DT: Morocco: double taxation agreement, Article 22: Elimination of double taxation
(1) In the case of residents of the United Kingdom, double taxation shall be avoided as follows:
Subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom (which shall not affect the general principle hereof):
- Moroccan tax payable under the laws of Morocco and in accordance with this Convention, whether directly or by deduction, on profits or income from sources within Morocco (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 United Kingdom tax computed by reference to the same profits or income by reference to which the Moroccan tax is computed.
- In the case of a dividend paid by a company which is a resident of Morocco to a company which is a resident of the United Kingdom and which controls 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 Moroccan tax for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the Moroccan tax payable by the company in respect of the profits out of which such dividend is paid.
Provided that residents of the United Kingdom deriving income
from Morocco may add to the Moroccan tax payable the amount which
they are required to invest in Moroccan equipment bonds in
accordance with Article 37 of Royal Decree No. 1010-65 of 8 Ramadan
1385 (31st December 1965) on the 1966 Finance Law; in this case,
any subsequent repayment of the bonds by the Moroccan Government
shall be deducted from the amount of the Moroccan tax creditable
against United Kingdom tax for the year in which the repayment is
made.
(2) For the purposes of paragraph (1) of this Article, the
term `Moroccan tax payable` shall be deemed to include any amount
which would have been payable as Moroccan tax for any year but for
an exemption or reduction of tax granted for that year or any part
thereof under:
- Dahir on Law No. 1-73-408 of 13 Rejeb 1393 (13th August 1973) in so far as it affects new enterprises;
Dahir on Law No. 1-73-409 of 13 Rejeb 1393 (13th August 1973);
Dahir on Law No. 1-73-410 of 13 Rejeb 1393 (13th August 1973);
Dahir on Law No. 1-73-411 of 13 Rejeb 1393 (13th August 1973);
Dahir on Law No. 1-73-412 of 13 Rejeb 1393 (13th August 1973);
Dahir on Law No. 1-73-413 of 13 Rejeb 1393 (13th August 1973);
so far as they were in force on, and have not been modified since, the date of signature of this Convention, or have been modified only in minor respects so as not to affect their general character; or
- any other provision which may subsequently be made granting an exemption or reduction of tax which is agreed by the competent authorities of the Contracting States to be of a substantially similar character, if it has not been modified thereafter or has been modified only in minor respects so as not to affect its general character.
Provided that relief from United Kingdom tax shall not be given by virtue of this paragraph in respect of income from any source if the income arises in a period starting more than ten years after the exemption from, or reduction of, Moroccan tax was first granted in respect of that source.
(3) In the case of residents of Morocco, double taxation shall be avoided as follows:
- Where a resident of Morocco derives income not covered by sub-paragraph (b) of this paragraph and which may be taxed in the United Kingdom in accordance with the provisions of this Convention, Morocco shall exempt such income from tax but may, in calculating the taxes on the remaining income of that person, apply the rate of tax which would have been applicable if the exempted income had not been so exempted.
- In the case of income covered by Articles 10, 11 and 12, Morocco may, in accordance with the provisions of its domestic law, include such income in the bases of the taxes covered by Article 2; however Morocco shall allow against the amount of the taxes on such income and only to the extent of that amount, a deduction equal to the amount of the taxes levied by the United Kingdom.
(4) For the purposes of paragraphs (1) and (3) of this Article profits, income and capital gains owned by a resident of a Contracting State which may be taxed in the other Contracting State in accordance with this Convention shall be deemed to arise from sources in that other Contracting State.
