METHODS FOR ELIMINATION OF DOUBLE TAXATION. 1. In Estonia, double taxation shall be avoided as follows: a) where a resident of Estonia derives income which, in accordance with the provisions of this Agreement, has been taxed in Kyrgyzstan, Estonia shall, subject to the provisions of sub-paragraph b), exempt such income from tax; b) where a resident of Estonia derives income which in accordance with the provisions of sub-paragraph b) of paragraph 2 of Article 10, or paragraph 2 of Articles 11 or 12 may be taxed in Kyrgyzstan, Estonia shall allow as a deduction from the tax on the income of that resident an amount equal to the tax paid in Kyrgyzstan. 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 Kyrgyzstan; c) where in accordance with any provision of the Agreement income derived by a resident of Estonia is exempt from tax in Estonia, Estonia may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income. 2. In Kyrgyzstan, double taxation shall be avoided as follows: a) Where a resident of Kyrgyzstan derives income which, in accordance with the provisions of this Agreement, may be taxed in Estonia Kyrgyzstan shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Estonia. The amount of the tax deducted in accordance with the aforementioned provisions shall not exceed the tax, which would have been charged to this income by the rates effective in Kyrgyzstan. b) Where a resident of Kyrgyzstan derives income which in accordance with the provisions of this Agreement shall be taxable only in Estonia, Kyrgyzstan may include this income in the tax base, but only for the purpose of establishing the tax rate for such income being applicable for taxation in Kyrgyzstan. 3. Notwithstanding the provisions of paragraphs 1 and 2, where a company that is a resident of a Contracting State receives a dividend from a company that is a resident of the other Contracting State in which it owns at least 10 per cent of its shares having full voting rights, the first-mentioned State shall allow as a deduction from the tax of that resident an amount equal to the income tax paid in that other State by the company on the profits out of which the dividend is paid.
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METHODS FOR ELIMINATION OF DOUBLE TAXATION. 1. In EstoniaSubject to the provisions of Luxembourg law regarding the elimination of double taxation which shall not affect the general principle hereof, double taxation shall be avoided eliminated as follows:
a) where a resident of Estonia Luxembourg derives income or owns capital which, in accordance with the provisions of this Agreement, has been may be taxed in Kyrgyzstanthe Isle of Man, Estonia Luxembourg shall, subject to the provisions of sub-paragraph paragraphs b), c) and d), exempt such income or capital from tax, but may, in order to calculate the amount of tax on the remaining income or capital of the resident, apply the same rates of tax as if the income or capital had not been exempted;
b) where a resident of Estonia Luxembourg derives income which which, in accordance with the provisions of sub-paragraph b) of paragraph 2 of Article Articles 7, 10, or paragraph 2 of Articles 11 or 12 13(2) and 16 may be taxed in Kyrgyzstanthe Isle of Man, Estonia Luxembourg shall allow as a deduction from the tax on the income of that resident an amount equal to the tax paid in Kyrgyzstanthe Isle of Man, but only, with respect to Articles 7 and 13(2), if the business profits and the capital gains are not derived from activities in agriculture, industry, infrastructure and tourism in the Isle of Man. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable to such items of income derived from the Isle of Man;
c) where a company which is a resident of Luxembourg derives dividends from Isle of Man sources, Luxembourg shall exempt such dividends from tax provided that the company which is a resident of Luxembourg holds directly at least 10 per cent of the capital of the company paying the dividends since the beginning of the accounting year and if this company is subject to the Isle of Man tax corresponding to the Luxembourg corporation tax. The above-mentioned shares in the Isle of Man company are, under the same conditions, exempt from the Luxembourg capital tax. This exemption under this sub-paragraph shall also apply notwithstanding that the Isle of Man company is exempted from tax or taxed at a reduced rate in the Isle of Man and if these dividends are derived out of profits from activities in agriculture, industry, infrastructure or tourism in the Isle of Man;
d) the provisions of sub-paragraph a) shall not apply to income derived or capital owned by a resident of Luxembourg where the Isle of Man applies the provisions of this Agreement to exempt such income or capital from tax or applies the provisions of paragraph 2 of Article 10 to such income.
2. In the case of the Isle of Man, double taxation shall be avoided as follows:
a) When imposing tax on its residents the Isle of Man may include in the basis upon which such taxes are imposed the items of income, which, according to the provisions of this Agreement, may be taxed in Luxembourg.
b) Where a resident of the Isle of Man derives income which, in accordance with the provisions of this Agreement, may be taxed in Luxembourg the Isle of Man shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Luxembourg. 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 Kyrgyzstan;Luxembourg.
c) where Where in accordance with any provision of the this Agreement income derived by a resident of Estonia the Isle of Man is exempt from tax in Estoniathe Isle of Man, Estonia the Isle of Man may nevertheless, nevertheless in calculating the amount of tax on the remaining income of such resident, take into account the exempted income.
2. In Kyrgyzstan, double taxation shall be avoided as follows:
a) Where a resident Note 24: The Isle of Kyrgyzstan derives income which, in accordance with Man has reserved the provisions right for the entirety of Articles 3 and 5 of the MLI not to apply to this Agreement so there have been no changes to this Article notwithstanding that Luxembourg has decided to apply Option A of Article 5 of the MLI. Luxembourg has reserved the right for paragraph 2 of Article 3 of the MLI not to apply to this Agreement, may be taxed in Estonia Kyrgyzstan shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Estonia. The amount of the tax deducted in accordance with the aforementioned provisions shall not exceed the tax, which would have been charged to this income by the rates effective in Kyrgyzstan.
b) Where a resident of Kyrgyzstan derives income which in accordance with the provisions of this Agreement shall be taxable only in Estonia, Kyrgyzstan may include this income in the tax base, but only for the purpose of establishing the tax rate for such income being applicable for taxation in Kyrgyzstan.
3. Notwithstanding the provisions of paragraphs 1 and 2, where a company that is a resident of a Contracting State receives a dividend from a company that is a resident of the other Contracting State in which it owns at least 10 per cent of its shares having full voting rights, the first-mentioned State shall allow as a deduction from the tax of that resident an amount equal to the income tax paid in that other State by the company on the profits out of which the dividend is paid.
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METHODS FOR ELIMINATION OF DOUBLE TAXATION. 1. In Estoniathe case of San Marino, double taxation shall be avoided as followsfollows :
a) where Where a resident of Estonia San Marino derives income which, in accordance with the provisions of this AgreementConvention, has been may be taxed in KyrgyzstanBelgium, Estonia San Marino shall, subject to the provisions of sub-paragraph paragraphs b), ) and c) exempt such income from tax;tax but may, nevertheless, in calculating the amount of tax on the remaining income of such resident, apply the same tax rate which would apply if the income in question were not exempt.
b) where Where a resident of Estonia San Marino derives income which which, in accordance with the provisions of sub-paragraph b) of paragraph 2 of Article 10Articles 10 and 11, or paragraph 2 of Articles 11 or 12 may be taxed in KyrgyzstanBelgium, Estonia San Marino shall allow as a deduction from the tax on the income of that resident resident, an amount equal to the tax paid in KyrgyzstanBelgium. 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 arising in Belgium.
c) Notwithstanding the provisions of sub-paragraph b), where a company which is a resident of San Marino has held at least 25 percent of the capital of a company which is a resident of Belgium paying dividends for at least 12 months prior to the decision to distribute the dividends, San Marino shall exempt from tax the dividends paid to the company which is a resident of San Marino by the company which is a resident of Belgium.
2. In the case of Belgium, double taxation shall be avoided as follows :
a) Where a resident of Belgium derives income, not being dividends, interest or royalties, which may be taxed in Kyrgyzstan;
c) where San Marino in accordance with any provision the provisions of the Agreement this Convention, and which are taxed there, Belgium shall exempt such income derived by a resident of Estonia is exempt from tax in Estonia, Estonia may neverthelessbut may, in calculating the amount of tax on the remaining income of that resident, apply the rate of tax which would have been applicable if such residentincome had not been exempted. However, in the case of a company which is a resident of Belgium, where the San Marino tax is less than 15 per cent of the net amount of the income referred to in this provision, Belgium shall not exempt that income, but reduce to a third the Belgian tax which is proportionally relating to that income, calculated as if that income were income from Belgian sources.
b) Notwithstanding the provisions of sub-paragraph a) of this paragraph and any other provision of this Convention, Belgium shall, for the determination of the additional taxes established by Belgian municipalities and conurbations, take into account the earned income (revenus professionnels - beroepsinkomsten) that is exempted from tax in Belgium in accordance with sub-paragraph a) of this paragraph. These additional taxes shall be calculated on the tax which would be payable in Belgium if the earned income in question had been derived from Belgian sources.
c) Dividends derived by a company which is a resident of Belgium from a company which is a resident of San Marino shall be exempt from the corporate income tax in Belgium under the conditions and within the limits provided for in Belgian law.
d) Subject to the provisions of Belgian law regarding the deduction from Belgian tax of taxes paid abroad, where a resident of Belgium derives items of his aggregate income for Belgian tax purposes which are interest or royalties, the San Marino tax levied on that income shall be allowed as a credit against Belgian tax relating to such income.
2. In Kyrgyzstan, double taxation shall be avoided as follows:
ae) Where a resident of Kyrgyzstan derives income whichWhere, in accordance with the provisions of this AgreementBelgian law, may be taxed in Estonia Kyrgyzstan shall allow as a deduction from the tax losses incurred by an enterprise carried on the income of that resident, an amount equal to the income tax paid in Estonia. The amount of the tax deducted in accordance with the aforementioned provisions shall not exceed the tax, which would have been charged to this income by the rates effective in Kyrgyzstan.
b) Where a resident of Kyrgyzstan derives income which Belgium in accordance with a permanent establishment situated in San Marino have been effectively deducted from the provisions profits of this Agreement that enterprise for its taxation in Belgium, the exemption provided for in sub-paragraph a) shall be not apply in Belgium to the profits of other taxable only periods attributable to that establishment to the extent that those profits have also been exempted from tax in Estonia, Kyrgyzstan may include this income in the tax base, but only San Marino by reason of compensation for the purpose of establishing the tax rate for such income being applicable for taxation in Kyrgyzstansaid losses.
3. Notwithstanding the provisions of paragraphs 1 and 2, where a company that is a resident of a Contracting State receives a dividend from a company that is a resident of the other Contracting State in which it owns at least 10 per cent of its shares having full voting rights, the first-mentioned State shall allow as a deduction from the tax of that resident an amount equal to the income tax paid in that other State by the company on the profits out of which the dividend is paid.
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METHODS FOR ELIMINATION OF DOUBLE TAXATION. 1. In Estoniathe case of the Isle of Man, double taxation shall be avoided as follows:
a) where When imposing tax on its residents the Isle of Man may include in the basis upon which such taxes are imposed the items of income, which, according to the provisions of this Agreement, may be taxed in Belgium.
b) Where a resident of Estonia the Isle of Man derives income which, in accordance with the provisions of this Agreement, has been taxed in Kyrgyzstan, Estonia shall, subject to the provisions of sub-paragraph b), exempt such income from tax;
b) where a resident of Estonia derives income which in accordance with the provisions of sub-paragraph b) of paragraph 2 of Article 10, or paragraph 2 of Articles 11 or 12 may be taxed in Kyrgyzstan, Estonia Belgium the Isle of Man shall allow as a deduction from the tax on the income of that resident resident, an amount equal to the income tax paid in KyrgyzstanBelgium. 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 Kyrgyzstan;Belgium.
c) Notwithstanding the provisions of sub-paragraph b), where in accordance with any provision of the Agreement income derived by a company which is a resident of Estonia the Isle of Man holds, for an uninterrupted period of at least twelve months, directly at least 10 per cent of the capital of a company which is a resident of Belgium paying dividends, the Isle of Man shall exempt from tax in Estonia, Estonia may nevertheless, in calculating the amount dividends paid to the company which is a resident of tax on the remaining income Isle of such resident, take into account Man by the exempted incomecompany which is a resident of Belgium.
2. In Kyrgyzstanthe case of Belgium, double taxation shall be avoided as follows:
a) Where a resident of Kyrgyzstan Belgium derives income whichincome, not being dividends, interest or royalties, which may be taxed in the Isle of Man in accordance with the provisions of this Agreement, may be and which are taxed there, Belgium shall exempt such income from tax but may, in Estonia Kyrgyzstan shall allow as a deduction from calculating the amount of tax on the remaining income of that resident, an amount equal to apply the income rate of tax paid in Estonia. The amount of the tax deducted in accordance with the aforementioned provisions shall not exceed the tax, which would have been charged applicable if such income had not been exempted. However, in the case of a company which is a resident of Belgium, where the Manx tax is less than 10 per cent of the net amount of the income referred to in this sub-paragraph, Belgium shall not exempt that income, but reduce to a third the Belgian tax which is proportionally relating to that income, calculated as if that income were income from Belgian sources. The preceding provisions of this sub-paragraph shall also apply to income treated as dividends under Belgian law, which is derived by a resident of Belgium from a participation in an entity that derives its status as such from the rates effective laws of the Isle of Man, where that entity has not been taxed as such in Kyrgyzstanthe Isle of Man, provided that the resident of Belgium has been taxed in the Isle of Man on his share of the income of that entity. The exempted income is the income received after deduction of the costs incurred in Belgium or elsewhere in relation to the management of the participation in the entity.
b) Where a resident of Kyrgyzstan derives income which in accordance with the provisions of this Agreement shall be taxable only in Estonia, Kyrgyzstan may include this income in the tax base, but only for the purpose of establishing the tax rate for such income being applicable for taxation in Kyrgyzstan.
3. Notwithstanding the provisions of paragraphs 1 sub-paragraph a) of this paragraph and 2any other provision of this Agreement, where Belgium shall, for the determination of the additional taxes established by Belgian municipalities and conurbations, take into account the earned income (revenus professionnels or beroepsinkomsten) that is exempted from tax in Belgium in accordance with sub-paragraph a) of this paragraph. These additional taxes shall be calculated on the tax which would be payable in Belgium if the earned income in question had been derived from Belgian sources.
c) Dividends derived by a company that which is a resident of a Contracting State receives a dividend Belgium from a company that which is a resident of the other Contracting State in which it owns at least 10 per cent Isle of its shares having full voting rights, the first-mentioned State Man shall allow as a deduction be exempt from the corporate income tax of that resident an amount equal to in Belgium under the conditions and within the limits provided for in Belgian law. However, this exemption shall apply when the income tax paid in that other State by the company on the profits out of which the dividend dividends are paid is paidtaxed in the Isle of Man at a rate of not less than 10 per cent.
d) Subject to the provisions of Belgian law regarding the deduction from Belgian tax of taxes paid abroad, where a resident of Belgium derives items of his aggregate income for Belgian tax purposes which are interest or royalties, the Manx tax levied on that income shall be allowed as a credit against Belgian tax relating to such income.
e) Where, in accordance with Belgian law, losses incurred by an enterprise carried on by a resident of Belgium in a permanent establishment situated in the Isle of Man have been effectively deducted from the profits of that enterprise for its taxation in Belgium, the exemption provided for in sub-paragraph a) shall not apply in Belgium to the profits of other taxable periods attributable to that establishment to the extent that those profits have also been exempted from tax in the Isle of Man by reason of compensation for the said losses.
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Sources: Double Taxation Agreement
METHODS FOR ELIMINATION OF DOUBLE TAXATION. 1. In Estoniathe case of the Isle of Man, double taxation shall be avoided as follows:
a) where When imposing tax on its residents the Isle of Man may include in the basis upon which such taxes are imposed the items of income, which, according to the provisions of this Agreement, may be taxed in Guernsey.
b) Where a resident of Estonia the Isle of Man derives income which, in accordance with the provisions of this Agreement, has been taxed in Kyrgyzstan, Estonia shall, subject to the provisions of sub-paragraph b), exempt such income from tax;
b) where a resident of Estonia derives income which in accordance with the provisions of sub-paragraph b) of paragraph 2 of Article 10, or paragraph 2 of Articles 11 or 12 may be taxed in Kyrgyzstan, Estonia Guernsey the Isle of Man shall allow as a deduction from the tax on the income of that resident resident, an amount equal to the income tax paid in KyrgyzstanGuernsey. 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 Kyrgyzstan;Guernsey.
c) where Where in accordance with any provision of the this Agreement income derived by a resident of Estonia the Isle of Man is exempt from tax in Estoniathe Isle of Man, Estonia the Isle of Man may nevertheless, nevertheless in calculating the amount of tax on the remaining income of such resident, take into account the exempted income.
2. In Kyrgyzstanthe case of Guernsey, double taxation shall be avoided as follows:: Subject to the provisions of the laws of Guernsey regarding the allowance as a credit against Guernsey tax of tax payable in a territory outside Guernsey (which shall not affect the general principle hereof):
a) Where subject to the provisions of sub-paragraph c), where a resident of Kyrgyzstan Guernsey derives income which, in accordance with the provisions of this the Agreement, may be taxed in Estonia Kyrgyzstan the Isle of Man, Guernsey shall allow as a deduction from the tax on the income payable in respect of that residentincome, an amount equal to the income tax paid in Estonia. The amount the Isle of the tax deducted in accordance with the aforementioned provisions shall not exceed the tax, which would have been charged to this income by the rates effective in Kyrgyzstan.Man;
b) Where such deduction shall not, however, exceed that part of the income tax, as computed before deduction is given, which is attributable to the income which may be taxed in the Isle of Man;
c) where a resident of Kyrgyzstan Guernsey derives income which which, in accordance with the provisions of this the Agreement shall be taxable only in Estoniathe Isle of Man, Kyrgyzstan Guernsey may include this income in calculating the amount of tax base, but only for the purpose of establishing the tax rate for such income being applicable for taxation in Kyrgyzstan.
3. Notwithstanding the provisions of paragraphs 1 and 2, where a company that is a resident of a Contracting State receives a dividend from a company that is a resident of the other Contracting State in which it owns at least 10 per cent of its shares having full voting rights, the first-mentioned State shall allow as a deduction from the tax of that resident an amount equal to the income tax paid in that other State by the company on the profits out remaining income of which the dividend is paidsuch resident.
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METHODS FOR ELIMINATION OF DOUBLE TAXATION. 1. In Estoniathe case of San Marino, double taxation shall be avoided as followsfollows :
a) where Where a resident of Estonia San Marino derives income which, in accordance with the provisions of this AgreementConvention, has been may be taxed in KyrgyzstanBelgium, Estonia San Marino shall, subject to the provisions of sub-paragraph paragraphs b), ) and c) exempt such income from tax;tax but may, nevertheless, in calculating the amount of tax on the remaining income of such resident, apply the same tax rate which would apply if the income in question were not exempt.
b) where Where a resident of Estonia San Marino derives income which which, in accordance with the provisions of sub-paragraph b) of paragraph 2 of Article 10Articles 10 and 11, or paragraph 2 of Articles 11 or 12 may be taxed in KyrgyzstanBelgium, Estonia San Marino shall allow as a deduction from the tax on the income of that resident resident, an amount equal to the tax paid in KyrgyzstanBelgium. 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 arising in Belgium.
c) Notwithstanding the provisions of sub-paragraph b), where a company which is a resident of San Marino has held at least 25 percent of the capital of a company which is a resident of Belgium paying dividends for at least 12 months prior to the decision to distribute the dividends, San Marino shall exempt from tax the dividends paid to the company which is a resident of San Marino by the company which is a resident of Belgium.
2. In the case of Belgium, double taxation shall be avoided as follows :
a) Where a resident of Belgium derives income, not being dividends, interest or royalties, which may be taxed in Kyrgyzstan;
c) where San Marino in accordance with any provision the provisions of the Agreement this Convention, and which are taxed there, Belgium shall exempt such income derived by a resident of Estonia is exempt from tax in Estonia, Estonia may neverthelessbut may, in calculating the amount of tax on the remaining income of that resident, apply the rate of tax which would have been applicable if such residentincome had not been exempted. However, in the case of a company which is a resident of Belgium, where the San Marino tax is less than 15 per cent of the net amount of the income referred to in this provision, Belgium shall not exempt that income, but reduce to a third the Belgian tax which is proportionally relating to that income, calculated as if that income were income from Belgian sources.
b) Notwithstanding the provisions of sub-paragraph a) of this paragraph and any other provision of this Convention, Belgium shall, for the determination of the additional taxes established by Belgian municipalities and conurbations, take into account the earned income (revenus professionnels – beroepsinkomsten) that is exempted from tax in Belgium in accordance with sub-paragraph a) of this paragraph. These additional taxes shall be calculated on the tax which would be payable in Belgium if the earned income in question had been derived from Belgian sources.
c) Dividends derived by a company which is a resident of Belgium from a company which is a resident of San Marino shall be exempt from the corporate income tax in Belgium under the conditions and within the limits provided for in Belgian law.
d) Subject to the provisions of Belgian law regarding the deduction from Belgian tax of taxes paid abroad, where a resident of Belgium derives items of his aggregate income for Belgian tax purposes which are interest or royalties, the San Marino tax levied on that income shall be allowed as a credit against Belgian tax relating to such income.
2. In Kyrgyzstan, double taxation shall be avoided as follows:
ae) Where a resident of Kyrgyzstan derives income whichWhere, in accordance with the provisions of this AgreementBelgian law, may be taxed in Estonia Kyrgyzstan shall allow as a deduction from the tax losses incurred by an enterprise carried on the income of that resident, an amount equal to the income tax paid in Estonia. The amount of the tax deducted in accordance with the aforementioned provisions shall not exceed the tax, which would have been charged to this income by the rates effective in Kyrgyzstan.
b) Where a resident of Kyrgyzstan derives income which Belgium in accordance with a permanent establishment situated in San Marino have been effectively deducted from the provisions profits of this Agreement that enterprise for its taxation in Belgium, the exemption provided for in sub-paragraph a) shall be not apply in Belgium to the profits of other taxable only periods attributable to that establishment to the extent that those profits have also been exempted from tax in Estonia, Kyrgyzstan may include this income in the tax base, but only San Marino by reason of compensation for the purpose of establishing the tax rate for such income being applicable for taxation in Kyrgyzstansaid losses.
3. Notwithstanding the provisions of paragraphs 1 and 2, where a company that is a resident of a Contracting State receives a dividend from a company that is a resident of the other Contracting State in which it owns at least 10 per cent of its shares having full voting rights, the first-mentioned State shall allow as a deduction from the tax of that resident an amount equal to the income tax paid in that other State by the company on the profits out of which the dividend is paid.
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METHODS FOR ELIMINATION OF DOUBLE TAXATION. 1. In EstoniaLuxembourg, double taxation shall be avoided as followsin the following manner:
a) where Where a resident of Estonia Luxembourg derives income or owns capital which may be taxed in Bulgaria, in accordance with the provisions of this Convention, Luxembourg shall, subject to the provisions of sub- paragraphs b) and c), exempt such income or such capital from taxation, but it may, in calculating the amount of tax on the remaining income or capital of such resident, apply the same rate as if the exempted income or items of capital in question had not been so exempted.
b) Where a resident of Luxembourg derives income which, in accordance with the provisions of this Agreement, has been taxed in Kyrgyzstan, Estonia shall, subject to the provisions of sub-paragraph b), exempt such income from tax;
b) where a resident of Estonia derives income which in accordance with the provisions of sub-paragraph b) of paragraph 2 of Article Articles 10, or paragraph 2 of Articles 11 or 12 and 12, may be taxed in KyrgyzstanBulgaria, Estonia then Luxembourg shall allow as a deduction from the tax on the income of that resident an amount equal to the tax paid in KyrgyzstanBulgaria. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction, which is attributable to such items of income derived from Bulgaria.
c) Where a company which is a resident of Luxembourg receives dividends from Bulgarian sources, then Luxembourg shall exempt such dividends from taxation, provided that the company which is a resident of Luxembourg has owned directly since the beginning of the operating period at least 25 % of the capital in the company paying the dividends. The foregoing shares or rights in the Bulgarian company shall be exempted from the Luxembourg tax on capital under the same conditions.
2. In Bulgaria, double taxation shall be avoided in the following manner:
a) Where a resident of Bulgaria derives income or owns capital which, in accordance with the provisions of this Convention, may be taxed in Luxembourg, Bulgaria shall, subject to the provisions of sub-paragraphs b) and c), exempt such income or capital from tax.
b) Where a resident of Bulgaria derives income which, in accordance with the provisions of Articles 10, 11 and 12 of this Convention, may be taxed in Luxembourg, Bulgaria shall allow as a deduction from the tax on the income of that resident an amount equal to the tax paid in Luxembourg. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable to the such items of income which may be taxed in Kyrgyzstan;derived from Luxembourg.
c) where 3. Where in accordance with any provision of the Agreement this Convention income derived or capital owned by a resident of Estonia Bulgaria is exempt from tax in EstoniaBulgaria, Estonia Bulgaria may nevertheless, in calculating the amount of tax on the remaining income or capital of such resident, resident take into account the exempted incomeincome or capital.
2. In Kyrgyzstan, double taxation shall be avoided as follows:
a) Where a resident of Kyrgyzstan derives income which, in accordance with the provisions of this Agreement, may be taxed in Estonia Kyrgyzstan shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Estonia. The amount of the tax deducted in accordance with the aforementioned provisions shall not exceed the tax, which would have been charged to this income by the rates effective in Kyrgyzstan.
b) Where a resident of Kyrgyzstan derives income which in accordance with the provisions of this Agreement shall be taxable only in Estonia, Kyrgyzstan may include this income in the tax base, but only for the purpose of establishing the tax rate for such income being applicable for taxation in Kyrgyzstan.
3. Notwithstanding the provisions of paragraphs 1 and 2, where a company that is a resident of a Contracting State receives a dividend from a company that is a resident of the other Contracting State in which it owns at least 10 per cent of its shares having full voting rights, the first-mentioned State shall allow as a deduction from the tax of that resident an amount equal to the income tax paid in that other State by the company on the profits out of which the dividend is paid.
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