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HMRC internal manual

Double Taxation Relief Manual

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HM Revenue & Customs
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DT: Grenada: double taxation agreement, Article 13: Elimination of double taxation

(1) Subject to the provisions of the law of the United Kingdom regarding the allowanceas a credit against United Kingdom tax of tax payable in a territory outside the UnitedKingdom (which shall not affect the general principle hereof) -

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

(b) Where a company which is a resident of Grenada 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 Grenada tax for which credit may be allowed under (a) of this sub-paragraph) the Grenada tax payable by that first-mentioned company in respect of the profits out of which such dividend is paid.

(2) Subject to the provisions of the law of Grenada regarding the allowance as a creditagainst Grenada tax of tax payable in a territory outside Grenada (which shall not affectthe general principle hereof) -

(a) 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 Grenada 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.

(b) Where a company which is a resident of the United Kingdom pays a dividend to a company resident in Grenada 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.

(3) For the purposes of this paragraph profits or remuneration for personal (includingprofessional) services performed in one of the territories shall be deemed to be incomefrom sources within that territory, and the services of an individual whose services alewholly or mainly performed in ships or aircraft operated by a resident of one of theterritories shall be deemed to be performed in that territory.

(4) Where Grenada income tax is payable for a year for which this Arrangement has effectin respect of any income in respect of which United Kingdom income tax is payable for ayear prior to the year beginning on the 6th April, 1949, then -

(a) in the case of a person resident in Grenada, the Grenada 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

(b) in the case of a person resident in the United Kingdom, the provisions of Section 46 of the Grenada Income Tax Ordinance, 1923, as amended by the Income Tax (Amendment) Ordinance, 1946, shall apply for the purposes of the allowance of relief from the Grenada tax.