DT3141 - DT: Bangladesh: 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) Bangladesh tax payable under the law of Bangladesh and in accordance with this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within Bangladesh (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 Bangladesh tax is computed;

(b) in the case of a dividend paid by a company which is a resident of Bangladesh to a company which is a resident of the United Kingdom 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 Bangladesh tax creditable under the provisions of sub-paragraph (a) of this paragraph) the Bangladesh tax payable by the company in respect of the profits out of which such a dividend is paid.

(2) For the purposes of paragraph (1) of this Article, the term `Bangladesh tax payable` shall be deemed to include any amount which would have been payable as Bangladesh tax for any year but for an exemption or reduction of tax granted for that year or any part thereof under any of the following provisions of Bangladesh law:

(a) clause (xiii) of sub-section (3) of section 4 of the Bangladesh Income tax Act;

clause (viia) of sub-section (2) of section 10 of the said Act;

sub-sections (2A), (2B), (2C) and (2D) of section 14A of the said Act;

paragraphs (c), (e), (f) and (g) of Notification number SRO417A-L/76 dated 29 November 1976; and

paragraphs (a), (b) and (d) of the said Notification so far as the exemption or relief relates to loans made with a view to promoting economic development in Bangladesh;

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

(b) under 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, Bangladesh tax was first granted in respect of that source; but this proviso shall not apply to interest within the scope of the said Notification.

(3) Subject to the provisions of the law of Bangladesh regarding the allowance as a credit against Bangladesh tax of tax payable in a territory outside Bangladesh (which shall not affect the general principle hereof), United Kingdom tax payable under the laws of the United Kingdom and in accordance with this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within the United Kingdom shall be allowed as a credit against any Bangladesh tax computed by reference to the same profits, income or chargeable gains by reference to which the United Kingdom tax is computed.

(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.

(5) Where profits on which an enterprise of a Contracting State has been charged to tax in that State are also included in the profits of an enterprise of the other State and the profits so included are profits which would have accrued to that enterprise of the other State if the conditions made between the enterprises had been those which would have been made between independent enterprises dealing at arm's length, the amount included in the profits of both enterprises shall be treated for the purposes of this Article as income from a source in the other State of the enterprise of the first- mentioned State and relief shall be given accordingly under the provisions of paragraph (1) or paragraph (3) of this Article.