Explanatory note

The Protocol set out in the Schedule to this Order makes certain alterations to the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Denmark) Order 1980 as amended by the Protocol set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Denmark) Order 1991.

The Protocol amends the provisions dealing with shipping and air transport so that profits from the operation of ships or aircraft in international traffic, and income from employment aboard such ships or aircraft will be taxable in the operator’s country of residence (Article I, II, VI & VII).

The dividends article is amended with the result that tax credits are no longer available to investors in one State who receive dividends from an enterprise of the other State (Article III).

Amendments are made to the dividends, interest and royalties articles to provide effective provisions against abuse of the articles (Articles III, IV & V).

The royalties article is amended to provide that royalties arising in one State which are derived and beneficially owned by a resident of the other State shall be taxable only in that other State (Article V).

The dependent personal services article is amended so that remuneration received from employment aboard a ship registered in the Danish International Shipping Register as detailed in Danish domestic legislation shall be treated as being subject to tax in Denmark (Article VII).

Amendments are made to the pensions article which will extend its provisions to personal pensions as well as employment pensions (Article VIII).

The elimination of double taxation article is updated in line with changes elsewhere in the Protocol (Article IX).

The miscellaneous rules article is amended to ensure equality of treatment in relation to pension scheme contributions where individuals working for associated companies move between the United Kingdom and Denmark (Article X).

The Protocol will enter into force on the date of the later of the notifications by each country of the completion of its legislative procedures. It will take effect in the United Kingdom for corporation tax on or after 1st April and for income and capital gains tax on or after 6th April in the calendar year following that in which it enters into force. The date of entry into force will in due course be published in the London, Edinburgh and Belfast Gazettes.