Explanatory note

The Protocol scheduled to this Order makes certain alterations to the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Netherlands) Order 1980 (S.I. 1980/1961), as amended by the Protocol set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Netherlands) Order 1983 (S.I. 1983/1902) (“the 1983 Protocol”).

The Protocol amends the list of taxes covered by the Convention and revises the definition of a United Kingdom national to reflect changes brought in by the British Nationality Act 1981 (c. 61). It also provides that investment premiums and disinvestment payments under the Netherlands Investment Account Law should not be taken into account in computing Netherlands tax allowable as a credit against United Kingdom tax.

The rules provided in the 1983 Protocol for the avoidance of the double taxation of residents of the United Kingdom and the Netherlands in respect of income, profits and capital gains from certain offshore activities on the United Kingdom and Netherlands Continental Shelves have been replaced but there are no major changes of substance.

The only minor change is the provision of a specific rule for the taxation of supply vessels, tugboats and anchor handling vessels and a consequential amendment to the provisions concerning the taxation of persons employed on these vessels.

The Protocol enters into force when the completion of the necessary procedures has been notified by each country to the other. It then takes effect in the United Kingdom for any year of assessment, financial year or chargeable period beginning on or after 1st 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.