Taxation (International and Other Provisions) Act 2010 section 141

Credit under Chapter 2 of Part 2 to be allowed first

Section 141 establishes a priority rule for the order in which different types of double taxation relief credits are applied against a person's income tax or capital gains tax liability.

• Where a person is entitled to both a foreign tax credit under a double taxation agreement and relief for special withholding tax, the foreign tax credit must be applied first.
• The relief for special withholding tax (covered in sections 137 to 140) is only given effect after the foreign tax credit has been allowed.
• This is a priority rule that determines the sequence in which different credits reduce a tax liability.
• "Foreign tax" means tax imposed by an overseas territory, as defined elsewhere in the legislation dealing with double taxation relief by way of credit.