ARTICLE 23

Relief from Double Taxation

Paragraph 1 provides that the United States shall give a foreign tax credit for the appropriate amount of income taxes paid or accrued to Barbados. Paragraph 1 provides a credit both for Barbadian taxes imposed on a recipient of income arising in Barbados and in the case of U.S. company owning at least 10 percent of the voting stock of a company resident in Barbados from which the U.S. company receives dividends in the taxable year, the appropriate amount of Barbadian taxes paid or accrued by the Barbadian company with respect to the profits out of which it paid dividends. In this regard, the Barbadian taxes referred to paragraphs 1(b) and 2 of Article 2 (Taxes Covered) are considered to be income taxes for purposes of paragraph 1.

The amount of credit granted under the Convention for Barbadian taxes subject to the limitations provided United States law for the taxable year the purposes of limiting the credit to U.S. tax on income from sources outside of the United States (see, for example Code section 904(g)).

Paragraph 2 provides that, subject the provisions and limitations of Barbadian law regarding the allowance of foreign tax credits, Barbados will allow to a resident of Barbados as a credit against Barbadian tax on income the appropriate amount of income tax paid or accrued to the United States, in the case of dividends from a United States company Barbadian company which owns at least 10 percent of the voting stock of U.S. company, Barbados will also allow a credit for the appropriate amount of United States tax imposed with respect to the profits out of which dividends paid. The U.S. taxes referred to in paragraph 1(a) and 2 of Article 2 are considered to be income taxes for purpose applying the Barbadian credit in relation to U.S. taxes.

Paragraph 3 sets forth the source of income rules generally applicable purposes of allowing relief under this Article. For purposes of the U.S. and Barbadian credits under paragraphs 1 and income derived by a resident of a Contracting State which may be taxed in the

other State in accordance with the Convention (other than by reason of citizenship under the saving clause of paragraph 3 of Article 1 (General Scope)) shall be deemed to arise from sources within that other Contracting State. Income derived by a resident of a Contracting State which may not be taxed in the other Contracting State in accordance with the Convention is deemed to arise, for purposes of paragraphs 1 and 2, in the first-mentioned State.

The saving clause in paragraph 3 of Article 1 does not apply to this Article. Thus, the provisions of this Article may be relied upon by a citizen or resident of a Contracting State.