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 Kingdom of the Netherlands for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital Gains (“the Convention”). The Convention was scheduled to the Double Taxation Relief and International Tax Enforcement (Taxes on Income and Capital) (Netherlands) Order 2009 (S.I. 2009/227). This Order brings the Protocol into effect.
The Convention aims to eliminate the double taxation of income or gains arising in one country and paid to residents of the other country. It does this 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. It also has specific measures which combat discriminatory tax treatment and provide for assistance in international tax enforcement. The Protocol continues this approach.
The Protocol replaces Article 7 (Business Profits) of the Convention to bring it into line with the latest approach of the Organisation for Economic Cooperation and Development (OECD) as set out in its Model Tax Convention on Income and on Capital. Article 18 is amended to ensure the effective taxation of government service income.
Article 1 provides for citation.
Article 2 makes a declaration as to the effect and content of the Arrangements.
The Protocol will enter into force on the last day of the month following that in which the later of the notifications by each country of the completion of its legislative procedures is received. It will take effect:
in the United Kingdom:
in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6th April next following the date of entry into force;
in respect of corporation tax, for any financial year beginning on or after 1st April next following the date of entry into force; and
in the Netherlands, for taxable years and periods beginning on or after 1st January next following the date of entry into force.
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 this Order as it gives effect to a previously announced policy to enact a double taxation agreement.