Australian Tax Treaties
In the case of Australia, relief from double taxation will be provided as follows: (a) Subject to the provisions of the laws of Australia which relate to the allowance of a credit against Australian tax of tax paid in a country outside Australia (which shall not affect the general principle of this Article), Icelandic tax paid under the laws of Iceland and in accordance with this Convention (except to the extent that the provisions of this Convention allow taxation by Iceland solely because the income is also income derived by a resident of Iceland), in respect of income derived by a resident of Australia shall be allowed as a credit against Australian tax payable in respect of that income.
2.
In the case of Iceland, relief from double taxation will be provided as follows: (a) Where a resident of Iceland derives income which may be taxed in the Australia in accordance with the provisions of this Convention, (except to the extent that these provisions allow taxation by Australia solely because the income is also income derived by a resident of Australia), Iceland shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Australia. Such deduction shall not, however, exceed that part of the income tax, as computed before the deduction is given, which is attributable to the income that may be taxed in Australia. (b) Where in accordance with any provision of the Convention income derived by a resident of Iceland is exempt from tax in Iceland, Iceland may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income.
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