DT5971 - DT: Denmark: double taxation agreement, Article 22: Elimination of double taxation. [See also Exchange of Notes at DT 5981.]
- 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):
- Danish tax payable under the laws of Denmark and in accordance
with this Convention, whether directly or by deduction, on profits,
income or chargeable gains from sources within Denmark (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
Danish tax is computed;
- in the case of a dividend paid by a company which is a resident
of Denmark 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 Danish tax creditable
under the provisions of sub-paragraph (a) of this paragraph) the
Danish tax payable by the company in respect of the profits out of
which such dividend is paid.
- Subject to the provisions of sub-paragraph (f) of this
paragraph, where a resident of Denmark derives income which, in
accordance with the provisions of this Convention, may be taxed in
the United Kingdom, Denmark shall allow as a deduction from the tax
on the income of that resident, an amount equal to the tax on the
income paid in the United Kingdom.
- Such deduction shall not, however, exceed that part of the
income tax, as computed before the deduction is given, which is
attributable to the income which may be taxed in the United
Kingdom.
- Subject to the provisions of sub-paragraph (d) of this
paragraph, dividends paid by a company which is a resident of the
United Kingdom to a company which is a resident of Denmark and
which holds directly at least 25 per cent. of the issued share
capital of the company paying the dividends shall be exempt from
tax in Denmark.
- The provisions of sub-paragraph (c) of this paragraph shall
apply only to the extent that:
(i) the profits out of which the dividends are paid have been subject to corporation tax in the United Kingdom, or to any other tax in the United Kingdom or elsewhere which is comparable to Danish tax; or
(ii) the dividends paid by the company which is a resident of the United Kingdom represent dividends received in respect of shares or other rights in a company which is a resident of a third State, which would have been exempt from Danish tax if those shares or rights were held directly by the company which is a resident of Denmark.
- In the case of dividends paid by a company which is a resident
of the United Kingdom to a company which is a resident of Denmark
and which holds directly at least 25 per cent. of the issued share
capital of the company paying the dividends, if the dividends are
not exempt from Danish tax in accordance with the provisions of
sub- paragraph (c) of this paragraph, the credit shall take into
account United Kingdom tax payable by the company paying the
dividends in respect of the profits out of which such dividends are
paid.
- Where a resident of Denmark derives income which, in accordance
with the provisions of this Convention shall be taxable only in the
United Kingdom, Denmark may include this income in the tax base,
but shall allow as a deduction from the income tax that part of the
income tax which is attributable to the income derived from the
United Kingdom.
- For the purposes of paragraphs (1) and (2) 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.
