DT18071 - DT: Sweden: double taxation agreement, Article 22: Elimination of double taxation

(1) 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):

(a) Swedish tax payable under the laws of Sweden and in accordance with the provisions of this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within Sweden (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, income or chargeable gains by reference to which the Swedish tax is computed;
(b) where such income is a dividend paid by a company which is a resident of Sweden to a company which is a resident of the United Kingdom and which controls directly or indirectly not less than one-tenth of the voting power in the former company, the credit shall take into account (in addition to any Swedish tax payable in respect of the dividend) the Swedish tax payable by that former company in respect of its profits.

(2)

(a) Where a resident of Sweden derives income or chargeable gains which under the laws of the United Kingdom and in accordance with the provisions of this Convention may be taxed in the United Kingdom, Sweden shall allow, subject to the limitations of the law of Sweden (as it may be amended from time to time without changing the general principle hereof), as a deduction from the tax on such income or chargeable gains, an amount equal to the United Kingdom tax paid in respect of such income or chargeable gains.
(b) Where a resident of Sweden derives income or chargeable gains which shall be taxable only in the United Kingdom in accordance with the provisions of Article 8, paragraph (4) of Article 13 and of paragraphs (1) or (2) of Article 19, Sweden shall allow as a deduction from the Swedish tax that part of the Swedish tax which is appropriate to the income or chargeable gains derived from the United Kingdom.

(3) Notwithstanding the provisions of paragraph (2) of this Article, dividends paid by a company which is a resident of the United Kingdom to a company which is a resident of Sweden shall be exempt from Swedish tax, provided that in accordance with the laws of Sweden the dividends would be exempt from tax if both companies had been residents of Sweden.

(4) For the purposes of the preceding paragraphs 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.