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The Supplementary Arrangement scheduled to this Order makes certain alterations to the Arrangement made in 1950 with the British Solomon Islands Protectorate, as amended by the Arrangement made in 1968.
These alterations follow from the introduction of the new United Kingdom corporation tax system which, so far as it relates to the tax treatment of dividends paid by a United Kingdom company to an overseas shareholder, came into operation on 6th April 1973. The Supplementary Arrangement provides that where a United Kingdom company pays a dividend to a resident of the Protectorate other than a company which controls 10 per cent or more of the voting power in the paying company, the recipient is, subject to certain conditions, to receive the tax credit to which an individual resident in the United Kingdom and in receipt of such a dividend would be entitled less income tax at a rate not exceeding 15 per cent on the aggregate of the dividend and the tax credit. Dividends paid by a company which is a resident of the Protectorate to a resident of the United Kingdom will continue to be exempt from any tax in the Protectorate which is chargeable on dividends in addition to the tax chargeable in respect of the profits or income of the company.
The Supplementary Arrangement is expressed to take effect in relation to dividends paid on or after 6th April 1973.
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