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- (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):
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- (a) Saudi tax payable under the laws of the Kingdom of Saudi Arabia and in accordance with this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within the Kingdom of Saudi Arabia (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Saudi tax is computed;
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- (b) in the case of a dividend paid by a company which is a resident of the Kingdom of Saudi Arabia to a company which is a resident of the United Kingdom and which controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividend, the credit shall take into account (in addition to any Saudi tax for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the Saudi tax payable by the company in respect of the profits out of which such dividend is paid.
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- (2) In the case of the Kingdom of Saudi Arabia, double taxation shall be eliminated as follows:
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- (a) where a resident of the Kingdom of Saudi Arabia derives income which, in accordance with the provisions of this Convention, may be taxed in the United Kingdom, the Kingdom of Saudi Arabia shall allow as a deduction from the tax on the income of that resident an amount equal to the tax paid in the United Kingdom. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable to such items of income derived from the United Kingdom;
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- (b) the methods for elimination of double taxation will not prejudice the provisions of the Zakat collection regime as regards Saudi nationals.
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- (3) For the purposes of paragraphs (1) and (2) of this Article, profits, income and capital gains owned by a resident of a Contracting State which may be taxed in the other Contracting State in accordance with this Convention shall be deemed to arise from sources in that other State.