where such income gives rise to a deduction for the purpose of determining the taxable profits of a resident

of the other Contracting Jurisdiction under the laws of that other Contracting Jurisdiction. In such case, the

first-mentioned Contracting Jurisdiction shall allow as a deduction from the tax on the income of that resident

an amount equal to the income tax paid in that other Contracting Jurisdiction. Such deduction shall not,

however, exceed that part of the income tax, as computed before the deduction is given, which is attributable

to such income which may be taxed in that other Contracting Jurisdiction.

5. Paragraph 4 shall apply to a Covered Tax Agreement that would otherwise require a Contracting Jurisdiction to exempt income described in that paragraph.

Option C

6. a) Where a resident of a Contracting Jurisdiction derives income or owns capital which may be taxed in the other Contracting Jurisdiction in accordance with the provisions of a Covered Tax

Agreement (except to the extent that these provisions allow taxation by that other Contracting

Jurisdiction solely because the income is also income derived by a resident of that other

Contracting Jurisdiction), the first-mentioned Contracting Jurisdiction shall allow:

i) as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in that other Contracting Jurisdiction;

ii) as a deduction from the tax on the capital of that resident, an amount equal to the capital tax paid in that other Contracting Jurisdiction.

Such deduction shall not, however, exceed that part of the income tax or capital tax, as computed

before the deduction is given, which is attributable to the income or the capital which may be

taxed in that other Contracting Jurisdiction.

b) Where in accordance with any provision of the Covered Tax Agreement income derived or capital

owned by a resident of a Contracting Jurisdiction is exempt from tax in that Contracting

Jurisdiction, such Contracting Jurisdiction may nevertheless, in calculating the amount of tax

on the remaining income or capital of such resident, take into account the exempted income or

capital.

7. Paragraph 6 shall apply in place of provisions of a Covered Tax Agreement that, for purposes of eliminating double taxation, require a Contracting Jurisdiction to exempt from tax in that Contracting

Jurisdiction income derived or capital owned by a resident of that Contracting Jurisdiction which, in

accordance with the provisions of the Covered Tax Agreement, may be taxed in the other Contracting

Jurisdiction.

8. A Party that does not choose to apply an Option under paragraph 1 may reserve the right for the entirety of this Article not to apply with respect to one or more identified Covered Tax Agreements (or with respect

to all of its Covered Tax Agreements).

9. A Party that does not choose to apply Option C may reserve the right, with respect to one or more identified Covered Tax Agreements (or with respect to all of its Covered Tax Agreements), not to permit the

other Contracting Jurisdiction(s) to apply Option C.

10. Each Party that chooses to apply an Option under paragraph 1 shall notify the Depositary of its choice of Option. Such notification shall also include:

II SÉRIE-A — NÚMERO 84____________________________________________________________________________________________________________

200