(1)
(a) Dividends paid by a company which is a resident of the
United Kingdom to a resident of The Gambia may be taxed in The
Gambia.
(b) Where a resident of The Gambia is entitled to a tax
credit in respect of such a dividend under paragraph (2) of this
Article, tax may also be charged in the United Kingdom and
according to the laws of the United Kingdom, on the aggregate of
the amounts or value of that dividend and the amount of that tax
credit at a rate not exceeding 15 per cent.
(c) Except as aforesaid dividends paid by a company which is
a resident of the United Kingdom to a resident of The Gambia who is
subject to tax in The Gambia on them shall be exempt from any tax
in the United Kingdom which is chargeable on dividends.
(2) A resident of The Gambia who receives dividends from a
company which is a resident of the United Kingdom shall, subject to
the provisions of paragraph (3) of this Article and provided he is
subject to tax in The Gambia on the dividends, be entitled to the
tax credit in respect thereof to which an individual resident in
the United Kingdom would have been entitled had he received those
dividends, and to the payment of any excess of that tax credit over
his liability to United Kingdom tax.
(3) Paragraph (2) of this Article shall not apply where the
recipient of the dividend is a company which either alone or
together with one or more associated companies controls directly or
indirectly at least 10 per cent of the voting power in the company
paying the dividend. For the purpose of this paragraph two
companies shall be deemed to be associated if one is controlled
directly or indirectly by the other, or both are controlled
directly or indirectly by a third company.
(4) Dividends paid by a company resident in The Gambia to a
resident of the United Kingdom may be taxed in the United Kingdom.
If the recipient of the dividends is subject to tax in the United
Kingdom in respect thereof they shall be exempt from any tax in The
Gambia which is chargeable on dividends in addition to the tax
chargeable in respect of the profits or income of the company.
(5) The term `dividends` as used in this Article means
income from shares or other rights, not being debt-claims,
participating in profits, as well as income from other corporate
rights assimilated to income from shares by the taxation law of the
territory of which the company making the distribution is a
resident and also includes any other item of income (other than
interest relieved from tax under Article 12 of this Convention)
which, under the law of the territory of which the company paying
the dividends is a resident, is treated as a dividend or
distribution of a company.
(6) If the recipient of a dividend is a company which owns
10 per cent or more of the class of shares in respect of which the
dividend is paid then paragraphs (1) and (2) or, as the case may
be, paragraph (4) of this Article shall not apply to the dividend
to the extent that it can have been paid only out of profits which
the company paying the dividend earned or other income which it
received in a period ending twelve months or more before the
relevant date. For the purposes of this paragraph the term
`relevant date` means the date on which the beneficial owner of the
dividend became the owner of 10 per cent or more of the class of
shares in question.
Provided that this paragraph shall not apply if the beneficial owner of the dividend shows that the shares were acquired for bona fide commercial reasons and not primarily for the purpose of securing the benefit of this Article.
(7) The provisions of paragraphs (1) and (2) or, as the case may
be, paragraph (4) of this Article shall not apply if the recipient
of the dividends, being a resident of one of the territories, has
in the other territory, of which the company paying the dividends
is a resident, a permanent establishment and the holding by virtue
of which the dividends are paid is effectively connected with the
business carried on through such permanent establishment.
(8) Where a company which is a resident of one of the
territories derives profits or income from sources within the other
territory, the Government of that other territory shall not impose
any form of taxation on dividends paid by the company to persons
not resident in that other territory, or any tax in the nature of
an undistributed profits tax on undistributed profits of the
company, by reason of the fact that those dividends or
undistributed profits represent, in whole or in part, profits or
income so derived.
