DT6720.23 - DT: Estonia: double taxation agreement: Article 23: Elimination of double taxation
- Where a resident of Estonia derives income or owns capital
gains which in accordance with this Convention, may be taxed in the
United Kingdom, unless a more favourable treatment is provided in
its domestic law, Estonia shall allow as a deduction from the tax
on the income of that resident, an amount equal to the United
Kingdom income tax or capital gains tax paid thereon in the United
Kingdom.
Such deduction in either case shall not, however, exceed that part of the income tax in Estonia as computed before the deduction is given, which is attributable to the income or capital gains which may be taxed in the United Kingdom.
- For the purpose of sub-paragraph (a) of this paragraph, where a
company that is a resident of Estonia receives a dividend from a
company that is resident of the United Kingdom in which it owns at
least 10 per cent of its shares having full voting rights, the tax
paid in the United Kingdom shall include not only the tax paid on
the dividend, but also the tax paid on the underlying profits of
the company out of which the dividend was paid.
- 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):
- Estonian tax payable under the laws of Estonia and in
accordance with this Convention, whether directly or by deduction,
on profits, income or chargeable gains from sources within Estonia
(excluding in the case of a dividend, tax payable in Estonia 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 Estonian tax is computed;
- in the case of a dividend paid by a company which is a resident
of Estonia 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 Estonian tax for which
credit may be allowed under the provisions of sub-paragraph (a) of
this paragraph) the Estonian tax payable by the company in respect
of the profits out of which such dividend is paid.
- 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.
