Article 23 - Elimination of Double Taxation - Slovak Republic

ARTICLE 23 ELIMINATION OF DOUBLE TAXATION 1. The laws in force in either of the Contracting States will continue to govern the taxation of income in the respective Contracting States except where provisions to the contrary are made in this Agreement. 2. [ REPLACED by paragraph 6 of Article 5 of the MLI] [In both the Contracting States, double taxation will be avoided in the following manner: (a) Where a resident of a Contracting State derives income which in accordance with the provisions of this Agreement, may be taxed in the other Contracting State, the first-mentioned State shall, subject to the provisions of sub-paragraph (b) of this paragraph, exempt such income from tax but may, in calculating tax on the remaining income of that person, apply the rate of tax which would have been applicable if the exempted income had not been so exempted. (b) Either of the Contracting States, when imposing taxes on its residents may include in the tax base upon which such taxes are imposed, the items of income which according to the provisions of Articles 10, 11 and 12 of this Agreement may also be taxed in the other State but shall allow as a deduction from the amount of tax computed on such a base an amount equal to the tax paid in the other Contracting State. Such deduction shall not, however, exceed that part of tax leviable by the first-mentioned State, as computed before the deduction is given, which is appropriate to the income which, in accordance with the provisions of Articles 10, 11 and 12 of this Agreement may be taxed in the other State.] 3. [ REPLACED by paragraph 6 of Article 5 of the MLI ] [For the purposes of sub-paragraph (b) of paragraph 2, the term tax paid in the other Contracting State shall be deemed to include any amount which would have been payable as tax but for any relief by way of the deduction allowed in computing the taxable income or an exemption or a reduction of tax or otherwise under the laws relating to taxation of income in force in that other Contracting State.] The following paragraph 6 of Article 5 of the MLI replaces paragraphs 2 and 3 of Article 23 of this Agreement: ARTICLE 5 OF THE MLI APPLICATION OF METHODS FOR ELIMINATION OF DOUBLE TAXATION Where a resident of a [Contracting State] derives income which may be taxed in the other [Contracting State] in accordance with the provisions of [the Agreement] (except to the extent that these provisions allow taxation by that other [Contracting State] solely because the income is also income derived by a resident of that other [Contracting State]), the first-mentioned [Contracting State] shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in that other [Contracting State]; 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 that other [Contracting State]. Where in accordance with any provision of [the Agreement] income derived by a resident of a [Contracting State] is exempt from tax in that [Contracting State], such [Contracting State] may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income.