A double taxation convention
The Netherlands and the United Kingdom have concluded a double taxation convention and protocol for the avoidance of double taxation. The agreement was signed on September 26 2008 and was entered into force on 25 December 2010. The convention has been effective in the United Kingdom from April 1 2011 for corporate tax and from April 6 2011 for income tax and capital gains tax.
The Convention was concluded between the two countries with the purpose of avoiding double taxation
for investors who have operational businesses in both of the countries and to prevent fiscal evasion on income taxes and capital gains. UK investors who want to open a Dutch company
can benefit from knowing how the treaty works. Our accounting firm in the Netherlands
can help you with relevant information about this Convention.
Taxes covered by the double taxation treaty
The double taxation treaty between the Netherlands and the UK covers all the individuals who are residents of one of both countries. The Convention applies to taxes on income and on capital gains imposed by one of the states included in the treaty, irrespective of the manner in which they are levied.
In the Netherlands the treaty applies to the following taxes:
- the income tax;
- the wages tax;
- the company tax;
In the United Kingdom the taxes for which the treaty applies are:
- the income tax;
- the corporate tax;
- the capital gains tax;
- the petroleum revenue tax;
- the additional charge in respect of ring fence trades.
The double taxation treaty also applies for any identical or similar taxes that are imposed by one of the states after the Convention has been signed or taxes that are levied in place of or in addition to existing ones. The two countries need to notify one another if any significant changes take place in their taxation laws.
If you want to know more about taxation in the Netherlands
or if you own a company and need to perform audit in the Netherlands, our Dutch accountants can help.
Double taxation treaty enforceability
For the purpose of the double tax treaty between the Netherlands and the United Kingdom, a resident of one of the states is considered a person or company that is liable to taxation in that state because his domicile, place of management or place of incorporation is in that state. Permanent establishments are considered a fixed place of business, such as a branch, an office, factory, workshop and others. The Convention also sets forth the taxation methods for other types of income, such as income from immovable property, business profits, dividends, interest, royalties or director’s fees.