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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 September 2021 at 10:29

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 June 2021
Algeria 15 June 2021
Anguilla 16 June 2021
Antigua and Barbuda 17 June 2021
Argentina 18 June 2021
Armenia 19 June 2021
Aruba 20 June 2021
Australia 21 June 2021
Austria 22 June 2021
Azerbaijan 23 June 2021
Bahrain 24 June 2021
Bangladesh 25 June 2021
Barbados 26 June 2021
Belarus 27 June 2021
Belgium 28 June 2021
Belize 29 June 2021
Bermuda 30 June 2021
Bolivia 01 July 2021
Bosnia-Herzegovina 02 July 2021
Botswana 03 July 2021
Brazil 04 July 2021
British Virgin Islands 05 July 2021
Brunei 06 July 2021
Bulgaria 07 July 2021
Cameroon 08 July 2021
Canada 09 July 2021
Cayman Islands 10 July 2021
Chile 11 July 2021
China 12 July 2021
Colombia 13 July 2021
Croatia 14 July 2021
Cyprus 15 July 2021
Czech Republic 16 July 2021
Denmark 17 July 2021
Egypt 18 July 2021
Estonia 19 July 2021
Ethiopia 20 July 2021
Falkland Islands 21 July 2021
Faroes 22 July 2021
Fiji 23 July 2021
Finland 24 July 2021
France 25 July 2021
Gambia 26 July 2021
Georgia 27 July 2021
Germany 28 July 2021
Ghana 29 July 2021
Gibraltar 30 July 2021
Greece 31 July 2021
Grenada 01 August 2021
Guernsey 02 August 2021
Guyana 03 August 2021
Hong Kong 04 August 2021
Hungary 05 August 2021
Iceland 06 August 2021
India 07 August 2021
Indonesia 08 August 2021
Iran 09 August 2021
Ireland 10 August 2021
Isle of Man 11 August 2021
Israel 12 August 2021
Italy 13 August 2021
Ivory Coast 14 August 2021
Jamaica 15 August 2021
Japan 16 August 2021
Jersey 17 August 2021
Jordan 18 August 2021
Kazakhstan 19 August 2021
Kenya 20 August 2021
Kiribati 21 August 2021
Kosovo 22 August 2021
Kuwait 23 August 2021
Kyrgyzstan 24 August 2021
Latvia 25 August 2021
Lebanon 26 August 2021
Lesotho  17 July 2019
Liberia 08 November 2017
Libya 26 April 2010
Liechtenstein 06 January 2013
Lithuania 03 January 2019
Luxembourg 05 November 2019
Macedonia 13 August 2007
Malawi 30 December 2013
Malaysia 13 January 2011
Malta 11 April 2019
Marshall Islands 08 November 2017
Mauritius 20 July 2018
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) November 2017
New Zealand 06 November 2018
Nigeria 05 February 2007
Norway 13 February 2014
Oman 13 June 2016
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 Kitts and Nevis 30 December 2013
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 06 October 2006
Spain 16 April 2018
Sri Lanka 30 December 2013
St Lucia 08 November 2017
Sudan 04 February 2013
Swaziland 02 January 2014
Sweden 23 February 2021
Switzerland 27 February 2020
Taiwan 13 September 2021
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 January 2020
United Arab Emirates 21 October 2019
Uruguay 21 August 2017
USA 09 August 2021
USSR 28 March 1999
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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