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Double Taxation: Treaties

Question for HM Treasury

UIN HL2843, tabled on 21 October 2015

To ask Her Majesty’s Government what consultation they undertake prior to, or during, negotiations with a developing country on a taxation treaty.

Answered on

4 November 2015

HM Revenue and Customs (HMRC) have responsibility for negotiating the UK’s double taxation agreements, subject to oversight by HM Treasury. HMRC run an annual consultation exercise to establish the negotiating priorities for the coming year, which are then approved by ministers. As part of this exercise they consider representations made by UK businesses, NGOs and government departments, including the Department for International Development, as well as the UK’s diplomatic missions throughout the world. When the programme is published it also invites representations about our forward programme.

HMRC’s programme for 2015/16 covers the following countries: Colombia, Fiji*, Ghana, Guernsey, India, Isle of Man, Israel, Jersey, Kazakhstan*, Kyrgyzstan, Lesotho*, Malawi*, Portugal*, Russia, Thailand*, Turkmenistan*, UAE*, US, Uruguay*.

The UK’s starting point in negotiations is based closely on the OECD Model Double Taxation Convention, which is also the basis for most other countries’ tax treaties. Some developing countries prefer to follow the UN Model, the provisions of which differ in some areas to the OECD Model, and the UK has agreed to adopt these provisions in its treaties. The object of the negotiations is to produce a text acceptable to both countries, balancing their preferences. There is no timetable for how long negotiations should take. It is quite normal for negotiations to take two to three rounds to complete.

Consultation during the negotiations would be rare.

*Negotiations largely completed.

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