The Double Taxation Relief (Taxes on Income)(Chile) Order 2003

Article 21 RELIEF FROM DOUBLE TAXATION

(1) In the case of Chile, double taxation shall be avoided as follows:

(a) a resident of Chile, obtaining income which has, in accordance with the provisions of this Convention, been subject to taxation in the United Kingdom, may credit the tax so paid against any Chilean tax payable in respect of the same income, subject to the applicable provisions of the law of Chile. This paragraph shall apply to all income referred to in this Convention;

(b) where, in accordance with any provision of this Convention, income derived by a resident of Chile is exempt from tax in Chile, Chile may nevertheless, in calculating the amount of tax on other income, take into account the exempted income.

(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) Chilean tax payable under the laws of Chile and in accordance with this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within Chile (excluding in the case of a dividend, tax payable in Chile on income, profits or gains 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 Chilean tax is computed;

(b) in the case of a dividend paid by a company which is a resident of Chile 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 Chilean tax for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the Chilean tax payable in respect of the income, profits or gains out of which such dividend is paid.

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