Article 23 Elimination of double taxation

The Netherlands, when imposing tax on its residents, may include in the basis upon which such taxes are imposed the items of income which, according to the provisions of this Convention, may be taxed in Azerbaijan.

However, where a resident of the Netherlands derives items of income which according to Article 6, Article 7, paragraph 6 of Article 10, paragraph 6 of Article 11, paragraph 5 of Article 12, paragraphs 1, 2 and 3 of Article 13, paragraph 1 of Article 14, paragraphs 1 and 3 of Article 15, Article 18, paragraphs 1 (subparagraph a) and 2 (subparagraph a) of Article 19 and paragraph 2 of Article 21 of this Convention may be taxed in Azerbaijan and are included in the basis referred to in paragraph 1, the Netherlands shall exempt such items of income by allowing a reduction of its tax. This reduction shall be computed in conformity with the provisions of Netherlands law for the avoidance of double taxation. For that purpose the said items of income shall be deemed to be included in the total amount of the items of income which are exempt from Netherlands tax under those provisions.

Further, the Netherlands shall allow a deduction from the Netherlands tax so computed for the items of income which according to paragraph 2 of Article 10, paragraph 2 of Article 11, paragraph 2 of Article 12, paragraph 6 of Article 13, Article 16, paragraphs 1 and 2 of Article 17 or paragraphs 1 and 2 of Article 22 of this Convention may be taxed in Azerbaijan to the extent that these items are included in the basis referred to in paragraph 1. The amount of this deduction shall be equal to the tax paid in Azerbaijan on these items of income, but shall not exceed the amount of the reduction which would be allowed if the items of income so included were the sole items of income which are exempt from Netherlands tax under the provisions of Netherlands law for the avoidance of double taxation.

Notwithstanding the provisions of paragraph 2, the Netherlands shall allow a deduction from the Netherlands tax for the tax paid in Azerbaijan on items of income which according to Article 7, paragraph 6 of Article 10, paragraph 6 of Article 11, paragraph 5 of Article 12 and paragraph 2 of Article 21 of this Convention may be taxed in Azerbaijan to the extent that these items are included in the basis referred to in paragraph 1, if and insofar as the Netherlands under the provisions of Netherlands law for the avoidance of double taxation allows a deduction from the Netherlands tax of the tax levied in another country on such items of income. For the computation of this deduction the provisions of paragraph 3 of this Article shall apply accordingly.

In Azerbaijan double taxation shall be eliminated as follows:

If a resident of Azerbaijan derives income or owns property in the Netherlands which according to the provisions of this Convention is taxable in the Netherlands, the amount of tax paid in the Netherlands on the income or on the property will be deducted from the tax levied from that person in respect of such income or property in Azerbaijan. Such deduction however shall not exceed the amount of tax due in Azerbaijan on the income or the property calculated in accordance with Azerbaijan law and tax regulation.