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Double Tax Treaties

If you are considered a tax resident in two or more countries, it is important to understand possible tax relief through double tax treaties

Last updated 21 November 2022 at 15:39

Double tax treaties (also known as double tax agreements) are created between two countries which define the tax rules when it comes to a tax resident of both countries.

Double tax treaties can be complex and often will require professional assistance, but they are created to try to ensure that an individual is able to claim tax relief rather than have to pay tax on the same income in two different jurisdictions.

Each double tax treaty is different, although many follow very similar guidelines - even if the details differ.

For the purpose of this article, we are considering an individual as being tax resident in the UK and an additional country, although double tax treaties can exist between any two countries.

If you are unsure of your UK tax residence status, please read our article about the Statutory Residence Test.

Application of double tax treaties and "treaty residence"

Where an individual is tax resident in the UK and also tax resident in another jurisdiction, i.e. a "dual resident", and the other jurisdiction has a tax treaty with the UK, the treaty divides the taxing rights over an individual’s income and gains between the two countries.

Essential to determining whether it is possible and then how to apply a double tax treaty is establishing the individual’s "treaty residence" position, as it is the country of treaty residence which generally assumes the taxing rights. 

Where you are treaty resident will be determined by applying a series of "tie breaker" tests as outlined in the relevant Double Tax Agreement in place with the UK.

Two typical examples where treaty non-residence are important are as follows:

UK employer, dual resident but treaty resident outside the UK

In this example, an individual works for a UK employer but is a dual resident and spends their time working in the UK and overseas. Given that the individual is working in two or more tax jurisdictions (including the UK) it is very important to determine where they are treaty resident.

In this scenario, the individual may be considered "treaty non-resident" from a UK perspective and therefore the Employment Income Article of the Double Tax Agreement will usually restrict the UK tax liability to UK workdays only. This means that tax on income would only be due to the UK HMRC for the days that the individual actually worked in the UK, and not days worked in other jurisdictions.

This arrangement is typical in scenarios where an expat is employed on a local UK contract, but their family have remained at home somewhere in Europe and they spend three to four days in the UK and the remaining time at the family home outside of the UK.

High net worth investor, dual resident but treaty resident outside the UK

If an individual is considered a treaty non-resident in the UK, under any double tax treaties in place, the individual would only be liable for tax in the UK where the income has come from UK activities. This is important because it means that all non-UK investment income and gains are sheltered from UK tax.

How to claim "treaty residence" under double tax treaties

Despite being relatively common, the application of double tax treaties, and therefore the claim for tax relief can be a complicated affair.

To begin the process, an individual who believes they may be tax resident in two jurisdictions, including the UK, must make a claim for treaty residence via a self-assessment tax return and a through a specific tax treaty relief claim.

It is possible for people to do this themselves, however, there are many rules, requirements and tests which need to be applied correctly to ensure that the correct tax residence statuses can be applied.

Far more common is to request the services of an accountant who is qualified and experienced in claiming tax relief using double tax treaties. Fees will vary depending on the level of complexity of an individual's personal circumstances, in nearly all cases the tax savings far exceed any costs incurred by using an accountant - and they can be sure that they are paying the right amount of tax with total confidence.

Countries with a double tax treaty with the UK

The following table lists the countries that have a double tax treaty with the UK (as of 21st September 2021). There is an up to date list on the UK Government's website on active and historical double tax treaties.

Country with double tax treaty Date last updated
Albania 14 01 June 2021
Algeria 14 August 2017
Anguilla 08 November 2017
Antigua and Barbuda 06 January 2014
Argentina 21 February 2014
Armenia 27 February 2014
Aruba 08 November 2017
Australia 31 May 2021
Austria 30 June 2021
Azerbaijan 27 February 1990
Bahamas 05 October 2021
Bahrain 27 October 1990
Bangladesh 27 February 1961
Barbados 26 August 1998
Belarus 10 August 2018
Belgium 10 January 2020
Belize 23 July 2018
Bermuda 02 July 2018
Bolivia 29 March 2005
Bosnia-Herzegovina 14 December 2020
Botswana 03 February 2014
Brazil 07 September 2022
British Virgin Islands 21 April 1999
Brunei 23 March 1995
Bulgaria 13 January 2017
Cameroon 14 April 2008
Canada 15 November 2019
Cayman Islands 20 January 2011
Chile 14 July 2022
China 27 July 2018
Colombia 18 December 2019
Croatia 04 April 2008
Cyprus 01 July 2022
Czech Republic 30 October 2020
Denmark 08 December 2020
Dominica 06 October 2021
Egypt 19 October 2007
Estonia 18 January 2017
Ethiopia 08 March 2013
Falkland Islands 05 February 2007
Faroes 03 March 2010
Fiji 19 October 2008
Finland 20 May 2019
France 20 May 2019
Gambia 11 August 2008
Georgia 15 November 2019
Germany 08 September 2022
Ghana 06 October 2006
Gibraltar 08 April 2020
Greece 15 August 2008
Grenada 28 July 2016
Guernsey 19 August 2022
Guyana 14 February 2007
Hong Kong 23 December 2010
Hungary 05 March 2012
Iceland 29 September 2021
India 12 October 2022
Indonesia 17 August 2007
Iran 19 December 2013
Ireland 13 August 2019
Isle of Man 12 October 2022
Israel 01 November 2019
Italy 06 August 2006
Ivory Coast 16 December 2012
Jamaica 17 December 2013
Japan 13 November 2018
Jersey 12 June 2019
Jordan 05 July 2005
Kazakhstan 06 January 2014
Kenya 27 December 2013
Kiribati 27 December 2013
Kosovo 08 January 2016
Kuwait 01 June 2005
Kyrgyzstan 21 July 2022
Latvia 22 February 2007
Lebanon 27 December 2013
Lesotho 17 July 2019
Liberia 08 November 2017
Libya 26 April 2010
Liechtenstein 16 January 2013
Lithuania 03 January 2019
Luxembourg 20 September 2022
Macao 06 October 2021
Macedonia 13 August 2007
Malawi 30 December 2013
Malaysia 13 January 2011
Malta 11 April 2019
Marshall Islands 08 November 2017
Mauritius 15 November 2021
Mexico 07 June 2011
Moldova 06 January 2009
Monaco 08 November 2017
Mongolia 27 March 2009
Montenegro 01 March 1989
Montserrat 27 December 2013
Morocco 20 August 2007
Myanmar (Burma) 14 June 2019
Namibia 30 December 2013
Netherlands 06 January 2020
Netherlands Antilles (Curacao,Sint Maarten and BES Islands) 08 November 2017
New Zealand 06 November 2018
Nigeria 05 February 2007
Norway 13 February 2014
Oman 14 October 2021
Pakistan 15 August 2006
Panama 17 December 2013
Papua New Guinea 22 February 2007
Philippines 15 November 2013
Poland 06 December 2018
Portugal 08 April 2013
Qatar 09 August 2011
Romania 30 December 2013
Russia 06 September 2006
Saint Christopher (Saint Kitts) and Nevis 27 October 2022
Saint Vincent and the Grenadines 06 October 2021
San Marino 06 October 2021
Saudi Arabia 19 February 2021
Senegal 02 August 2016
Serbia 12 October 2018
Sierra Leone 30 December 2013
Singapore 20 May 2019
Slovak Republic 01 January 2019
Slovenia 11 October 2018
Solomon Islands 30 December 2013
South Africa 01 June 2015
South Korea 28 September 2021
Spain 16 April 2018
Sri Lanka 30 December 2013
St Lucia 08 November 2017
Sudan 04 February 2013
Swaziland 02 January 2014
Sweden 07 April 2022
Switzerland 29 September 2021
Taiwan 07 April 2022
Tajikistan 14 January 2016
Thailand 02 January 2014
Trinidad and Tobago 02 January 2014
Tunisia 02 January 2014
Turkey 18 August 2006
Turkmenistan 24 January 2017
Turks and Caicos Islands 08 November 2017
Tuvalu 02 January 2014
Uganda 02 March 2007
Ukraine 17 May 2022
United Arab Emirates 21 October 2019
Uruguay 21 August 2017
USA 09 August 2021
Uzbekistan 27 July 2018
Venezuela 21 February 2007
Vietnam 22 February 2007
Zaire 02 January 2014
Zambia 02 January 2014
Zimbabwe 02 January 2014

The impact of Brexit on double tax treaties

As every tax treaty is agreed between the two jurisdictions, rather than through the EU or EEC there will not be any impact on any tax treaties between the UK and any other country. However, as with any country, as trade deals are negotiated there may be changes in the future but not as a consequence of Brexit.

Get help understanding possible double tax treaties with a free tax introduction

As there are many rules and complications which can arise when attempting to apply double tax treaties, it is important to seek professional assistance from a qualified and experienced accountant.

Therefore we offer free introductions to tax specialists who will offer a short initial consultation who will be able to provide you with answers to your questions and help you understand whether a double tax treaty could apply to you and help you save significant amounts of unnecessary tax.

If you decide that you wish to proceed with any tax advice or services on offer, you will be provided with a quote after which you can decide whether you wish to go ahead or not.

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