The Double Taxation Relief (Taxes on Income) (Lithuania) Order 2001

Article 24 Elimination of double taxation

(1) (a) Where a resident of Lithuania derives income or capital gains which, in accordance with this Convention, may be taxed in the United Kingdom, unless a more favourable treatment is provided in its domestic law, Lithuania shall allow as a deduction from the tax on the income of that resident, an amount equal to the United Kingdom income tax, corporation tax or capital gains tax paid thereon in the United Kingdom.

• Such deduction shall not, however, exceed that part of the tax in Lithuania as computed before the deduction is given, which is attributable as the case may be, to the income or capital gains which may be taxed in the United Kingdom.

(b) For the purpose of sub-paragraph (a) of this paragraph, where a company that is a resident of Lithuania receives a dividend from a company that is a resident of the United Kingdom in which it owns at least 10 per cent. of its shares having full voting rights, the tax paid in the United Kingdom shall include not only the tax paid on the dividend, but also the tax paid on the underlying profits of the company out of which the dividend was paid.

(2) Subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom (which shall not affect the general principle hereof):

(a) Lithuanian tax payable under the laws of Lithuania and in accordance with this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within Lithuania (excluding in the case of a dividend, tax payable in Lithuania in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Lithuanian tax is computed;

(b) in the case of a dividend paid by a company which is a resident of Lithuania to a company which is a resident of the United Kingdom and which controls directly or indirectly at least 10 per cent. of the voting power in the company paying the dividend, the credit shall take into account (in addition to any Lithuanian tax for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the Lithuanian tax payable by the company in respect of the profits out of which such dividend is paid.

(3) For the purposes of paragraphs (1) and (2) of this Article, profits, income and capital gains owned by a resident of a Contracting State which may be taxed in the other Contracting State in accordance with this Convention, shall be deemed to arise from sources in that other Contracting State.