Explanatory note
(This note is not part of the Order)
The Schedule to this Order contains a Protocol (“the Protocol”) which amends a Convention between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the State of Israel dealing with the elimination of double taxation with respect to taxes on income and on capital gains and the prevention of tax avoidance and evasion (“the Convention”). This Order brings the Protocol into effect.
The Convention was scheduled to the Double Taxation Relief and International Tax Enforcement (Israel) Order 1970 (S.I. 1971/391).
The Convention aims to eliminate the double taxation of income and gains arising in one country and paid to residents of the other country. This is done by allocating the taxing rights that each country has under its domestic law over the same income and gains, and/or by providing relief from double taxation. There are also specific measures which combat discriminatory tax treatment and provide for assistance in international tax enforcement. The Protocol continues this approach.
Article 1 provides for citation.
Article 2 makes a declaration as to the effect and content of the Protocol.
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 as follows:
in respect of taxes withheld at source, on amounts paid or credited on or after 1st January of the calendar year following the year in which this Protocol enters into force;
in Israel, in respect of other taxes on income, on taxes chargeable for any tax year beginning on or after 1st January of the calendar year following the year in which this Protocol enters into force;
in the United Kingdom in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6th April following the date on which this Protocol enters into force;
in respect of corporation tax, for any financial year beginning on or after 1st April following the date on which this Protocol enters into force;
notwithstanding paragraphs (a) to (d) above, the provisions of Articles XIX (Exchange of Information) and XX (Mutual Assistance Procedure) of the Convention, as amended by this Protocol (including, if appropriate, paragraph (2) of Article 17 of this Protocol), shall have effect from the date of entry into force of this Convention without regard to the taxable period to which the matter relates.
The date of entry into force will, in due course, be published in the London, Edinburgh and Belfast Gazettes.
A Tax Information and Impact Note has not been produced for the Order as it gives effect to a double tax agreement. Double taxation agreements impose no obligations on taxpayers, rather they seek to eliminate double taxation and fiscal evasion.