ARTICLE 23

Elimination of Double Taxation

(1) Subject to the laws of the Islamic Republic of Iran regarding the allowance as a credit against the Islamic Republic of Iran direct tax of tax payable in any country other than Islamic Republic of Iran, Malaysian tax payable under the laws of Malaysia and in accordance with this Agreement by a resident of the Islamic Republic of Iran in respect of income derived from Malaysia shall be allowed as a credit against Islamic Republic of Iran direct tax payable in respect of that income. Where such income is a dividend paid by a company which is a resident of Malaysia to a company which is a resident of the Islamic Republic of Iran and which owns not less than 15 percent of the voting shares of the company paying the dividend, the credit shall take into account Malaysian tax payable by that company in respect of its income out of which the dividend is paid. The credit shall not, however, exceed that part of the Islamic Republic of Iran direct tax, as computed before the credit is given, which is appropriate to such item of income.

(2) For the purposes of paragraph (1), the term "Malaysian tax payable" shall be deemed to include taxes which have been relieved or reduced in Malaysia by virtue of special incentive laws for the promotion of the economic development of Malaysia or any other provisions which may subsequently be introduced in Malaysia in modification of, or in addition to, those laws or by virtue of the provision of this Agreement shall be deemed to have been paid and shall whenever applicable be allowed as a credit in the Islamic Republic of Iran in amount equal to tax which would have been paid if no such relief or reduction had been made.

(3) Subject to the laws of Malaysia regarding the allowance as a credit against Malaysian of tax payable in any country other than Malaysia, the Islamic Republic of Iran direct tax payable under the laws of the Islamic Republic of Iran in accordance with this Agreement by a resident of Malaysia in respect of income derived from the Islamic Republic of Iran shall be allowed as a credit against Malaysian tax payable in respect of that income. Where such income is a dividend paid by a company which is a resident of Islamic Republic of Iran to a company which is a resident of Malaysia and which owns not less than 15 percent of the voting shares of the company paying the dividend, the credit shall take into account the Islamic Republic of Iran direct tax payable by that company in respect of its income out of which the dividend is paid. The credit shall not, however, exceed that part of the Malaysian tax, as computed before the credit is given, which is appropriate to such item of income.

(4) For the purposes of paragraph (3), the term "Islamic Republic of Iran direct tax payable" shall be deemed to include taxes which have been relieved or reduced in the Islamic Republic of Iran by virtue or special incentives laws for the promotion of economic development of the Islamic Republic of Iran or any other provisions which may subsequently be introduced in the Islamic Republic of Iran in modification of, or in addition to, those laws or by virtue of provision of this Agreement shall be deemed to have been paid and shall whenever applicable be allowed as a credit in Malaysia in an amount equal to tax which would have been paid if no such relief or reduction had been made.