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Article 23 - Elimination of Double Taxation - Portuguese RepublicExtract CHAPTER IV METHODS FOR ELIMINATION OF DOUBLE TAXATION ARTICLE 23 ELIMINATION OF DOUBLE TAXATION 1. The laws in force in either of the Contracting State will continue to govern the taxation of income in the respective Contracting States except where provisions to the contrary are made in this Convention. 2. In the case of Portugal double taxation shall be eliminated as follows: Where a resident of Portugal derives income which, in accordance with the provisions of this Convention, may be taxed in India, Portugal shall allow as a deduction from the tax on the income of that resident an amount equal to the income tax paid in India. 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 India. 3. In the case of India double taxation shall be eliminated as follows: Where a resident of India derives income which, in accordance with the provisions of this Convention, may be taxed in Portugal, India shall allow as a deduction from the tax on the income of that resident an amount equal to the income-tax paid in Portugal whether directly or by deduction at source. Such amount 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 Portugal. 4. Where in accordance with any provisions of this Convention, income derived by a resident of a Contracting State is exempt from tax in that State, such State may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income. 5. The tax paid in a Contracting State mentioned in paragraphs 1 [ 2 and 3 ] of this article shall be deemed to include the tax on dividends, interest, royalties and fees for included services and business profits which would have been payable as laid down in this Convention but for the legal provisions concerning tax reduction or exemption of the Contracting States for the encouragement of genuine investment or economic development. The provisions of this paragraph shall apply for the first seven years during which this Convention is applicable. This period may be extended by mutual agreement between the competent authorities. ************** NOTES: - 1 . Substituted vide Notification No. 199/2005 dated 20-9-2005 before it was read as, 1 and 2
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