Article 23 Methods for elimination of double taxation

when the Netherlands imposes a tax on its residents, it may include in the basis upon which such taxes are imposed the items of income which, according to the provisions of this Convention, may or shall be only taxable in the Kingdom of Saudi Arabia.

However, where a resident of the Netherlands derives items of income which according to Article 6, Article 7, paragraph 4 of Article 10, paragraph 5 of Article 11, paragraph 4 of Article 12, paragraphs 1 and 2 of Article 13, paragraph 1 of Article 14, paragraph 1 of Article 15, paragraphs 1 (a) and 2 (a) of Article 19 and paragraph 2 of Article 22 of this Convention may be taxed in the Kingdom of Saudi Arabia and are included in the basis referred to in paragraph 1 (a), 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 the Netherlands law for the avoidance of double taxation. For that purpose the said items of income shall be deemed to be included in the 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 (b) of Article 10, paragraph 3 of Article 13, Article 16, paragraphs 1 and 2 of Article 17 and paragraph 3 of Article 18 of this Convention may be taxed in the Kingdom of Saudi Arabia to the extent that these items are included in the basis referred to in paragraph 1 (a). The amount of this deduction shall be equal to the tax paid in the Kingdom of Saudi Arabia on these items of income, but shall, in case the provisions of the Netherlands law for the avoidance of double taxation provide so, not exceed the amount of the deduction 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 the Netherlands law for the avoidance of double taxation.

This paragraph shall not restrict allowance now or hereafter accorded by the provisions of the Netherlands law for the avoidance of double taxation, but only as far as the calculation of the amount of the deduction of Netherlands tax is concerned with respect to the aggregation of income from more than one country and the carry forward of the tax paid in the Kingdom of Saudi Arabia on the said items of income to subsequent years.

Notwithstanding the provisions of paragraph 1 (b) of this Article, the Netherlands shall allow a deduction from the Netherlands tax for the tax paid in the Kingdom of Saudi Arabia on items of income which according to Article 7, paragraph 4 of Article 10, paragraph 5 of Article 11, paragraph 4 of Article 12 and paragraph 2 of Article 22 of this Convention may be taxed in the Kingdom of Saudi Arabia to the extent that these items are included in the basis referred to in paragraph 1 (a), insofar as the Netherlands under the provisions of the 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 1 (c) of this Article shall apply accordingly.

where a resident of the Kingdom of Saudi Arabia derives income which, in accordance with the provisions of this Convention, may be taxed in the Netherlands, the Kingdom of Saudi Arabia shall, subject to the provisions of paragraph 2 (b) of this Article, exempt such income from tax.

where a resident of the Kingdom of Saudi Arabia derives items of income which, in accordance with the provisions of Articles 10, 11, 12 and paragraphs 3 and 4 of Article 13 may be taxed in the Netherlands, the Kingdom of Saudi Arabia shall allow as a deduction from the tax on the income of that resident an amount equal to the tax paid in the Netherlands. 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 Netherlands.

In the case of the Kingdom of Saudi Arabia, the methods for elimination of double taxation will not prejudice to the provisions of the Zakat collection regime as regards Saudi nationals.