HM REVENUE AND
CUSTOMS News Release (NAT 57.08) issued by COI News Distribution
Service. 18 November 2008
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