Italy (tax/treaty)

ELIMINATION OF DOUBLE TAXATION 1. It is agreed that double taxation shall be avoided in accordance with the following paragraphs of this Article. 2. In the case of Italy: If a resident of Italy owns items of income which are taxable in Saudi Arabia, Italy, in determining its income taxes specified in Article 2 of this Convention, may include in the basis upon which such taxes are imposed the said items of income, unless specific provisions of this Convention otherwise provide. In such a case, Italy shall deduct from the taxes so calculated the income tax paid in Saudi Arabia but in an amount not exceeding that proportion of the aforesaid Italian tax which such items of income bear to the entire income. 3. In the case of Saudi Arabia: If a resident of Saudi Arabia derives income which, in accordance with the provisions of this Convention, may be taxed in Italy, then Saudi Arabia shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Italy. Such deduction in either case shall not, however, exceed that part of the income tax, as computed before the deduction is given, which is attributable to the income or the capital which may be taxed in Italy. 4. For the purposes of the provisions in paragraphs 2 and 3 of this Article, where tax on business profits arising in a Contracting State is exempted or reduced for a limited period of time in accordance with the laws and regulations of that State to promote foreign investments for economic development purposes, such tax which has been exempted or reduced shall be deemed to have been paid. The provisions of this paragraph shall apply for the first 10 years for which this Convention is effective Chapter VI Special Provisions