(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) Grenada tax payable under the laws of Grenada and in
accordance with this Arrangement, whether directly or by deduction,
on profits or income from sources within Grenada shall be allowed
as a credit against any United Kingdom tax computed by reference to
the same profits or income by reference to which Grenada tax is
computed. Provided that in the case of a dividend the credit shall
only take into account such tax in respect thereof as is additional
to any tax payable by the company on the profits out of which the
dividend is paid and is ultimately borne by the recipient without
reference to any tax so payable.
(b) Where a company which is a resident of Grenada pays a
dividend to a company resident in the United Kingdom which controls
directly or indirectly at least 10 per cent. of the voting power in
the first-mentioned company, the credit shall take into account (in
addition to any Grenada tax for which credit may be allowed under
(a) of this sub-paragraph) the Grenada tax payable by that
first-mentioned company in respect of the profits out of which such
dividend is paid.
(2) Subject to the provisions of the law of Grenada regarding the allowance as a credit against Grenada tax of tax payable in a territory outside Grenada (which shall not affect the general principle hereof) -
(a) United Kingdom tax payable under the laws of the United
Kingdom and in accordance with this Arrangement, whether directly
or by deduction, on profits or income from sources within the
United Kingdom shall be allowed as a credit against any Grenada tax
computed by reference to the same profits or income by reference to
which the United Kingdom tax is computed. Provided that in the case
of a dividend the credit shall only take into account such tax in
respect thereof as is additional to any tax payable by the company
on the profits out of which the dividend is paid and is ultimately
borne by the recipient without reference to any tax so payable.
(b) Where a company which is a resident of the United
Kingdom pays a dividend to a company resident in Grenada which
controls directly or indirectly at least 10 per cent. of the voting
power in the first-mentioned company, the credit shall take into
account (in addition to any United Kingdom tax for which credit may
be allowed under (a) of this sub-paragraph) the United Kingdom tax
payable by that first-mentioned company in respect of the profits
out of which such dividend is paid.
(3) For the purposes of this paragraph profits or remuneration
for personal (including professional) services performed in one of
the territories shall be deemed to be income from sources within
that territory, and the services of an individual whose services
ale wholly or mainly performed in ships or aircraft operated by a
resident of one of the territories shall be deemed to be performed
in that territory.
(4) Where Grenada income tax is payable for a year for which
this Arrangement has effect in respect of any income in respect of
which United Kingdom income tax is payable for a year prior to the
year beginning on the 6th April, 1949, then -
(a) in the case of a person resident in Grenada, the Grenada
income tax shall, for the purposes of sub-paragraph (2) of this
paragraph, be deemed to be reduced by the amount of any relief
allowable in respect thereof under the provisions of Section 27 of
the United Kingdom Finance Act, 1920; and
(b) in the case of a person resident in the United Kingdom,
the provisions of Section 46 of the Grenada Income Tax Ordinance,
1923, as amended by the Income Tax (Amendment) Ordinance, 1946,
shall apply for the purposes of the allowance of relief from the
Grenada tax.
