Taxation: Treaties

HM Treasury written question – answered at on 4 November 2015.

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Photo of Lord McConnell of Glenscorrodale Lord McConnell of Glenscorrodale Labour

To ask Her Majesty’s Government with which developing countries they are currently negotiating taxation treaties, and what is the timetable for each negotiation.

Photo of Lord McConnell of Glenscorrodale Lord McConnell of Glenscorrodale Labour

To ask Her Majesty’s Government what terms they seek in taxation treaties with developing countries, and how they agree those terms before opening negotiations.

Photo of Lord McConnell of Glenscorrodale Lord McConnell of Glenscorrodale Labour

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

Photo of Lord McConnell of Glenscorrodale Lord McConnell of Glenscorrodale Labour

To ask Her Majesty’s Government to what extent they take into account development goals when negotiating taxation treaties with developing countries, and what role the Department for International Development has in those negotiations.

Photo of Lord O'Neill of Gatley Lord O'Neill of Gatley The Commercial Secretary to the Treasury

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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