UK and Iran To Discuss Double Taxation Treaty

by Robert Lee, Tax-News.com, London

12 June 2003

The Inland Revenue announced this week that discussions are soon to be held by officials from the United Kingdom and Iran with the aim of working towards a double taxation agreement between the two nations.

According to the Revenue there are more than 1,300 Double Taxation Conventions world-wide and the UK has one of the largest networks covering more than 100 countries. The UK has sought to encourage and maintain an international consensus on the appropriate tax treatment of cross border economic activity and thus promote international trade. The UK plays an important role in this field within the Organisation for Economic Co-operation and Development, the IR explained.

Double Taxation Conventions aim to eliminate the double taxation of income or gains arising in one State and paid to residents of another State. They do this by dividing the taxing rights that each treaty partner has under its domestic law over the same income and gains. They provide additional protection for taxpayers by specific measures combating discrimination in tax treatment.

More generally, Conventions benefit the taxpayer by ensuring certainty of treatment and, as far as possible, by reducing compliance burdens. Double Taxation Conventions also serve an Exchequer protection role by including provisions to combat avoidance and evasion - not least by measures providing for the exchange of information between Revenue authorities.

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