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HMRC Unveils Tax Treaty Negotiating Priorities

by Jason Gorringe, Tax-News.com, London

27 July 2007


Financial Secretary to the UK Treasury, Jane Kennedy on Wednesday announced details of the UK's treaty negotiating priorities for the year to 31 March 2008.

Ms Kennedy stated that:

"I am pleased to announce the programme of work on double taxation conventions for the year to 31 March 2008. The UK has a comprehensive network of bilateral conventions and is committed to maintaining and strengthening this network. Double taxation conventions provide an agreed framework for individuals and businesses when dealing with overseas tax systems."

The Government reviews the UK's Double Taxation Convention (DTC) priorities each year to ensure that the treaty network continues to meet the needs of the businesses and individuals receiving income from abroad.

HM Revenue & Customs monitors the DTC networks of other countries and invites representations from business, individuals, representative bodies, other Government departments and others with an interest in this area. We use the results, balanced with an estimate of the resources available, to produce a schedule of work for the year ahead.

In a statement on the matter, HMRC revealed that that:

"We plan to complete work on new DTCs with the Faroes, Macedonia, Moldova, Slovenia and Thailand; and on Protocols with Australia, Mexico, New Zealand, South Africa and Switzerland. We also plan to complete work on new Tax Information Exchange Agreements (TIEAs) with Jersey, Guernsey, the Isle of Man, Anguilla, Bermuda and the British Virgin Islands."

"We intend to progress negotiations with Bahrain, the Cayman Islands, China, Croatia, Germany, Hungary, Luxembourg, Libya, Netherlands, Peru and Saudi Arabia."

With regard to planned new talks, the tax authority revealed that:

"We have plans to commence negotiations with the Turks & Caicos Islands, the Netherlands Antilles, Aruba, the Bahamas and Panama on TIEAs. We will make further announcements about DTC talks with other jurisdictions as and when arrangements are in place."

Commenting on recent developments, HMRC announced that:

"The DTC between the UK and the Republic of Botswana, signed in Gaborone on 9 September 2005, entered into force on 4 September 2006. The text has been published as the Schedule to the Double Taxation Relief (Taxes on Income) (Botswana) Order 2006 (Statutory Instrument 2006 No. 1925), copies of which can be obtained from The Office of Public Sector Information."

"In the UK the provisions of the Convention have effect from 1 April 2007 (for corporation tax purposes), and from 6 April 2007 (for income tax and capital gains tax purposes). In Botswana, the provisions take effect from 1 July 2007."

"The new DTC between the UK and Japan, which was signed in London on 2 February 2006, entered into force on 12 October 2006...In the UK, the provisions of the Convention take effect from 1 January 2007 (for taxes withheld at source), 1 April 2007 (for corporation tax purposes), and from 6 April 2007 (for income tax and capital gains tax purposes). In Japan, the provisions take effect from 1 January 2007."

"A new comprehensive DTC between the UK and Macedonia was signed in Skopje on 8 November 2006...It has been published as a schedule to a Draft Order in Council and was approved by the Second Committee on Delegated Legislation on 10 July 2007. The Draft Order will be considered by the Privy Council in due course and will enter into force once both countries have completed their necessary legislative procedures and notified each other of that fact."

"The new DTC between the UK and Poland, signed on 20 July 2006, entered into force on 27 December 2006. In the UK the DTC has effect from 1 January 2007 for withholding tax purposes, from 1 April 2007 for corporation tax purposes and from 6 April 2007 for other tax purposes. In Poland, the DTC has effect from 1 January 2007."

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