We have had a start of work in 2020 in the area of UK tax policy, which includes significant and positive developments in the UK`s network of double taxation conventions. 2019 ended with the conclusion by the United Kingdom of an agreement on double taxation with Colombia, the entry into force of the Israeli Treaty and the publication of the summary texts of the Multilateral Convention on the Implementation of Measures related to the Tax Convention to Prevent Erosion and Profit Transfer – the Multilateral Instrument (MLI) – with important jurisdictions, including Canada, India and Luxembourg. In 2020, we have developments with Belgium, the Netherlands and Ukraine. For example, the new DTT does not exclude the taxation of partners in their country of residence on their share of income, profits or profits from a partnership established in the other contracting state. The new DTT contains specific provisions that generally aim to avoid double taxation and non-taxation of so-called „transparent“ entities. The new DTT no longer contains such a residence arrangement. Rather, it provides that when a company is domiciled in both the United Kingdom and the Netherlands, the competent authorities must agree on the residence by mutual agreement and not on the basis of determining the place of effective administration. If there is no mutual agreement, the company is deemed not to reside in any of the parties and is therefore not entitled to the benefits of the new DTT, with the exception of the terms of double taxation, non-discrimination and mutual agreement of the new DTT. A comprehensive agreement and protocol (SI 2009/227) came into force on 25 December 2010 and comes into force: the treaty amendments are intended to discourage hybrid collection schemes, which can lead to double non-taxation or two-year deductions for the same income and abuse of contract. In addition, provisions are added to prevent non-application of settlement rules, and they are also intended to improve dispute resolution. Look at tax rates, the latest tax news and information on double taxation agreements with our specialized online resources, guides and useful links. In cases where the same income, profits or profits are considered to be derived from a person in both states, the treaty does not prevent taxation in both states. This could apply to companies that are described as non-transparent in one state and transparent in the other.
The updated contract between the Netherlands and the United Kingdom contains a new preamble that indicates that the DBA is not intended to create opportunities for non-taxation or tax reduction by tax evasion, or tax evasion or contractual shopping, and attempts at abuse are thwarted by the provisions of the treaty. It contains stricter provisions for the settlement of the mutual agreement procedure in the event of a double taxation dispute and provides for further adaptations to combat the misuse of transfer pricing to allow tax authorities to adjust transfer prices in order to obtain minimum duration results. In addition, the new DTT also introduces a number of new measures, particularly for Dutch real estate institutions (due to a 15% Dutch commitment on dividends and a large taxation of Dutch savings on capital gains by UK shareholders) that could affect cross-border transactions and, therefore, undermine one of the objectives of the new DTT, which is expected to further improve economic relations between the United Kingdom and the Netherlands. Agreement on the exchange of tax information: Netherlands Antilles – Reciprocity agreement with the Netherlands Antilles on the European Directive on Interest Products in the Form of Interest. Additional information on taxation in that country may appear in general works that are not on this list.