Explanatory note

Under the Agreement with Barbados scheduled to this Order (which is to replace the Arrangement made in 1949), shipping and air transport profits, certain trading profits not arising through a permanent establishment, dividends, royalties (other than royalties in respect of cinematograph or television films), pensions (other than Government pensions) purchased annuities and the earnings of temporary business visitors are (subject to certain conditions) to be taxed only in the country of the taxpayer's residence. Government salaries and pensions are normally to be taxed by the paying Government. The remuneration of visiting professors and teachers and payments made for the maintenance of visiting students are (subject to certain conditions) to be exempt in the country visited. Capital gains arising from the disposal of movable property are normally to be taxed only in the country of the taxpayer's residence unless they arise from the disposal of assets of a permanent establishment which the taxpayer has in the other country.

The rate of tax in the source country on interest paid to residents of the other country is, in general, not to exceed 15 per cent.

Where income continues to be taxable in both countries, the country of the taxpayer's residence will relieve the double taxation by giving a credit for the other country's tax. In the case of dividends credit for the tax on the profits out of which the dividends are paid is to be given where the recipient of the dividends is a company which controls at least 10 per cent of the voting power in the paying company. The credit to be given by the United Kingdom includes credit for Barbados tax which would have been payable but for relief granted under certain provisions of Barbados law in order to encourage development there.

The Agreement is not to apply to companies entitled to certain special tax benefits under Barbados law.

There are provisions safeguarding residents and enterprises of one country against discriminatory taxation in the other country and for the exchange of information and consultation between the taxation authorities of the two countries.

The Agreement is in general to take effect in the United Kingdom for 1969-70 and subsequent years.