Government sets out future double taxation convention plans

Date: 20th August 2008

The government has announced that it will look to negotiate double taxation conventions with a number of new countries in the coming year.

Finance secretary Jane Kennedy revealed that HM Revenue & Customs (HMRC) plans to complete work on new double taxation conventions (DTCs) with the Netherlands, Ethiopia, Libya and Thailand by the end of March 2009.

It will also look to put in place tax information agreements with Brazil, Jersey, Guernsey, Isle of Man and the British Virgin Islands.

Finally, HMRC will try to ensure negotiations with China, the US, Spain, Belgium, Luxembourg and Hungary continue to move forward.

"The UK has a comprehensive network of bilateral double taxation conventions and we are committed to maintaining and strengthening this network," Ms Kennedy explained.

A statement from HMRC explained that business owners with an income source in a country other than the one they are officially registered in might be liable to pay tax in both countries.

"To avoid 'double taxation' in this situation, the UK has negotiated double taxation (DT) treaties with more than 100 other countries," it added.

"If you are a resident of a country with which the UK has a double taxation treaty, you may be able to claim exemption or partial relief from UK tax on certain types of income from UK sources."