ARTICLE 23

Elimination of Double Taxation

Double taxation shall be avoided as follows:

(1) In the case of Iran:

• The amount of the tax levied in France, in accordance with the provisions of this Convention, on income originating in France shall be allowed as a deduction from the Iranian tax on the same income. The amount deductible shall not exceed that part of the Iranian tax, as computed before the deduction is given, which is appropriate to the income originating in France.

(2) In the case of France:

• (a) Income other than that referred to in sub-paragraph (b) below shall be exempt from the French taxes referred to in Article 2, paragraph (3)(b), where such income may be taxed in Iran under this Convention.
• (b) As regards income referred to in Articles 10, 11, 12, 16 and 17 which has borne Iranian tax in accordance with the provisions of those Articles, France shall allow residents of France receiving such income from Iranian sources a tax credit corresponding to the amount of the tax levied in Iran.
• This tax credit, which shall not exceed the amount of the tax levied on such income, shall be allowed against the taxes referred to in Article 2, paragraph (3)(b), in the bases of which such income is included.
• (c) However, if dividends or royalties referred to in sub-paragraph (b) above are exempt from Iranian tax, or are taxed in Iran at a reduced rate, under special measures laid down by Iranian law to encourage the development of Iran's economy, there shall be allowed as a deduction from the French tax on such dividends or royalties the amount of the Iranian tax which would be payable in the absence of such special measures, it being understood that the amount thus deductible shall not exceed the amount which may be levied as Iranian tax in accordance with the provisions of Article 10, paragraph (2)(b), and Article 12, paragraph (2), respectively. The competent authorities of the Contracting States shall determine by agreement, in accordance with Article 25, which are the provisions of Iranian law laying down special measures in the sense of the foregoing provisions.
• (d) Notwithstanding the provisions of Article 1, paragraph (2), of this Convention, where dividends are distributed by a company being a resident of Iran which has been subjected to the Iranian tax on the profits of petroleum companies, such dividends shall entitle the recipient to a tax credit calculated at the rate specified in Article 10, paragraph (2)(b), which shall be allowed against French tax as specified in the second sentence of sub-paragraph (b) above.
• (e) Notwithstanding the provisions of sub-paragraphs (a) and (b) above, French tax on income which may be taxed in France under this Convention may be calculated at the rate appropriate to the total amount of income which may be taxed in accordance with French law.