UK And France Sign New Double Tax Treaty

by Robert Lee, Tax-News.com, London

20 June 2008

The UK government has announced that a new comprehensive Double Taxation Convention between the United Kingdom and France was recently signed by Alistair Darling, Chancellor of the Exchequer, and his French counterpart Christine Lagarde.

The new agreement, which was signed by Darling and Lagarde in London on 19th June, replaces the new Double Tax Convention between the UK and France that was originally signed in January 2004 by Dawn Primarolo, UK Paymaster General, and Gerard Errera, the French Ambassador to the United Kingdom.

According to the announcement, changes to the tax systems in both countries meant that that Convention signed in 2004 could not be taken forward, and it has been replaced by the Convention signed on Thursday, which incorporates additional improvements over the 2004 text.

The new text will be laid as a Schedule to a Draft Order in Council for consideration by the House of Commons later this year.

Welcoming the signature, Darling stated that: "This new Convention represents continued progress in our efforts to modernise our network of Double Taxation Conventions and marks a valuable step forward with one of the UK's most important trading and investment partners."

The Convention will enter into force once both countries have completed their Parliamentary procedures, and it will replace the existing Convention which dates from 1968.

The Convention with France that was signed in 2004 will not now be presented to Parliament, and will therefore not enter into force.

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