HM Revenue and Customs
 Printable version
|
 E-mail this to a friend
|
First Double Taxation Convention with Libya
The first ever Double Taxation Convention between the UK and the Great Socialist People's Libyan Arab Jamahiriya was signed on 17 November in London by the Foreign Office Minister of State, Bill Rammell and the Libyan Secretary for European Affairs, Abdulatti al-Obidi.
Welcoming the Convention, Mr. Rammell commented: "This Double Taxation Convention will bring benefits to British business in Libya and Libyan investors in the UK - benefits in terms of certainty, clarity and transparency and reducing tax compliance burdens."
The treaty largely follows the OECD Model Double Taxation Convention. Important features include, with one exception, the complete elimination of source-country withholding taxes on dividends, interest and royalty payments.
The text of the new Convention is available on HM Revenue & Customs' website, at http://www.hmrc.gov.uk/international/signed.htm#http://www.hmrc.gov.uk/international/signed.htm and will be presented to Parliament for approval, when it will be published by the Stationery Office.
The Convention will enter into force once both countries have completed their legislative procedures. In the United Kingdom the provisions of the Convention will take effect from 1 April (for corporation tax purposes), and from 6 April (for income tax and capital gains tax purposes) in the calendar year following the date of entry into force. In Libya, the provisions will take effect from 1 January in the calendar year following the date of entry into force.
Notes for editors
1. Double Taxation Conventions aim to
eliminate the double taxation of income or gains arising in one
country and paid to residents of the other country. They do this
by dividing the taxing rights that each country has under its
domestic law over the same income and gains. They provide
additional protection for taxpayers by specific measures combating
discrimination in tax treatment. More generally, Conventions
benefit individuals and businesses by ensuring certainty of
treatment and, as far as possible, by reducing compliance burdens.
Double Taxation Conventions also serve an Exchequer protection
role by including provisions to combat avoidance and evasion - not
least by measures providing for the exchange of information
between revenue authorities.
2. The UK has a large network of Double Taxation Conventions covering more than 100 countries. The UK seeks to encourage and maintain an international consensus on the appropriate tax treatment of cross border economic activity and thus promote international trade and investment. The UK plays an important role in this field within the Organisation for Economic Co-operation and Development.
3. The Government keeps the terms of the United Kingdom's Double Taxation Conventions under continuous review.
Issued by HM Revenue & Customs Press Office
Website http://www.hmrc.gov.uk
