ARTICLE 22

Elimination of Double Taxation

Double taxation shall be eliminated as follows:

(1) In the Czech Republic, the Czech Republic, when imposing taxes on its residents, may include in the tax base upon which such taxes are imposed the items of income which, in accordance with the provisions of this Convention, may also be taxed in South Africa, but shall allow as a deduction from the amount of tax computed on such base an amount equal to the tax paid in South Africa. Such deduction shall not, however, exceed that part of the Czech tax, as computed before the deduction is given, which is attributable to the income which, in accordance with the provisions of this Convention, may be taxed in South Africa.

(2) In South Africa, taxes paid by South African residents in respect of income taxable in the Czech Republic, in accordance with the provisions of this Convention, shall be deducted from the taxes due according to the South African fiscal law. 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 which may be taxed in the Czech Republic.

(3) A grant given by one of the Contracting States, a political subdivision or any agency thereof to a resident of the other Contracting State under the laws of, and for the purpose of promoting economic development in the first-mentioned State shall not be subject to tax in the other State.

(4) As regards the application of the provisions of paragraph (2), it is understood that the amount of tax which is attributable to such income which has been subjected to tax in the Czech Republic shall be:

• (a) where the tax on such income is computed by applying a proportional rate, the amount of the net income concerned multiplied by the rate which actually applies to that income; and
• (b) where the tax on such income is computed by applying a progressive scale, an amount which bears to the net income concerned the same ratio as the total tax actually payable bears to the total net income which is subject to tax in accordance with South African fiscal law.