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HMRC internal manual

Double Taxation Relief Manual

From
HM Revenue & Customs
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DT: Brunei: double taxation agreement, Article 12: Elimination of double taxation

Paragraph 12(1) was substituted by SI68/306 below

  1. 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)-

 

 

  1. Brunei tax payable under the laws of Brunei and in accordance with this Arrangement, whether directly or by deduction, on profits or income from sources within Brunei shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits or income by reference to which the Brunei tax is computed.

Provided that in the case of a dividend the credit shall only take into account such tax in respect thereof as is additional to any tax payable by the company on the profits out of which the dividend is paid and is ultimately borne by the recipient without reference to any tax so payable.
Where a company which is a resident of Brunei pays a dividend to a company resident in the United Kingdom which controls directly or indirectly at least 10 per cent. of the voting power in the first-mentioned company, the credit shall take into account (in addition to any Brunei tax for which credit may be allowed under (a) of this subparagraph) the Brunei tax payable by that first-mentioned company in respect of the profits out of which such dividend is paid.
Paragraph 12(2) was substituted by SI68/306 below

  1. Subject to the provisions of the law of Brunei regarding the allowance as a credit against Brunei tax of tax payable in a territory outside Brunei (which shall not affect the general principle hereof)-

 

 

  1. United Kingdom tax payable under the laws of the United Kingdom and in accordance with this Arrangement, whether directly or by deduction, on profits or income from sources within the United Kingdom shall be allowed as a credit against any Brunei tax computed by reference to the same profits or income by reference to which the United Kingdom tax is computed.

Provided that in the case of a dividend the credit shall only take into account such tax in respect thereof as is additional to any tax payable by the company on the profits out of which the dividend is paid and is ultimately borne by the recipient without reference to any tax so payable.

  1. Where a company which is a resident of the United Kingdom pays a dividend to a company resident in Brunei which controls directly or indirectly at least 10 per cent. of the voting power in the first- mentioned company, the credit shall take into account (in addition to any United Kingdom tax for which credit may be allowed under (a) of this sub-paragraph) the United Kingdom tax payable by that first- mentioned company in respect of the profits out of which such dividend is paid.`

 

  1. For the purposes of this paragraph profits or remuneration for personal (including professional) services performed in one of the territories shall be deemed to be income from sources within that territory, and the services of an individual whose services are wholly or mainly performed in ships or aircraft operated by a resident of one of the territories shall be deemed to be performed in that territory.

  2. Where Brunei income tax is payable for a year for which this Arrangement has effect in respect of any income in respect of which United Kingdom income tax is payable for a year prior to the year beginning on the 6th April, 1950, then-

 

 

  1. in the case of a person resident in Brunei, the Brunei income tax shall for the purposes of sub-paragraph (2) of this paragraph, be deemed to be reduced by the amount of any relief allowable in respect thereof under the provisions of Section 27 of the United Kingdom Finance Act, 1920; and

  2. in the case of a person resident in the United Kingdom, the provisions of Section 39 of the Brunei Income Tax Enactment, 1949, shall apply for the purposes of the allowance of relief from the Brunei tax.