Under Barbados domestic law, a withholding tax may be levied on
dividends paid by Barbados companies. However, a resident of the
United Kingdom who is subject to United Kingdom tax on a dividend
paid by a Barbados company is entitled to exemption from such
withholding tax under Article 9(4) as amended by the further
agreement.
Exemption is not given if the dividend is effectively
connected with (see INTM153110 fifth subparagraph) a business
carried on by the United Kingdom resident recipient through a
permanent establishment in Barbados.
Where the recipient of a dividend is a United Kingdom
company controlling, directly or indirectly, not less than 10 per
cent of the voting power in the Barbados company paying the
dividend, it will be entitled to relief for the underlying tax (see
INTM164010) (Article 22(1)(b)).
