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UK's Inland Revenue Releases Double Taxation And Contribution Agreements Details

Amanda Banks, Tax-news.com, London

04 April 2001


Last week we reported that the UK government had published details of its changes to the double taxation avoidance regime as announced by the Chancellor in his budget speech three weeks ago, as well as a revised draft Regulatory Impact Assessment (RIA) allowing for changes to the double taxation regime laid out in both the Finance Act 2000 and Finance Bill 2001.

The Inland Revenue has now published the details of its double taxation agreements (DTAs) and double contribution agreements (DCAs), which are the result of a consultation exercise involving business, representative organisations and other interested parties. In a statement released by the Inland Revenue, Paymaster General Dawn Primarolo explained: 'Double taxation agreements are important for business as they provide certainty of tax treatment for those involved in cross border trade or investment abroad. They also aim to prevent fiscal discrimination against UK business interests overseas. Our top priority during the coming year is to conclude work on the new agreement with the United States. Double contribution agreements are also important as they help to encourage cross- border movements of labour by preventing simultaneous charging of social security contributions in a worker's home country and in the host country.'

Ms Primarolo continued: 'The treaty networks are reviewed annually to ensure that they remain up-to-date and responsive to developments in the UK and abroad. I am pleased to announce the UK programme of work on double taxation agreements and double contribution agreements for the year to 31st March 2002.'

For progress up to 31 March, 2001, it was noted that DTAs with Kuwait and Norway entered into force on 1 July 2000 and 21 December 2000 respectively. DTAs with Lithuania and Hong Kong (a limited agreement on
shipping) have been signed and these will enter into force once all parliamentary procedures have been completed. Negotiations on DTAs have also taken place in the last 12 months with Australia, Canada, Chile, Georgia, Jordan, Namibia, Qatar, South Africa, Taiwan, the UAE and the United States. DCAs with Korea and Japan entered into force on 1 August 2000 and 1 February 2001 respectively.

For progress up to 31 March, 2002, the Inland Revenue has decided that the top priority will be the continuation of the current DTAs with the United States. The department also aims to complete DTA work on new treaties with France, Jordan and South Africa and to continue talks with Australia, Chile, Namibia, Qatar, Taiwan and the UAE. The press release stated: 'We also hope to complete the work on Protocols to the existing treaties with Canada and the Netherlands.' As for the DCAs the Inland Revenue aims to complete the outstanding work on a new treaty with Slovakia and to continue negotiations with Chile.

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