- A+
Double Tax Agreement between the UK and Netherlands
The Double Taxation Agreement (DTA) signed between the United Kingdom and the Netherlands provides relief from double taxation for individuals and businesses that operate or have income from both countries. This agreement is important because it aims to ensure that taxpayers are not taxed twice on the same income in both countries.
The DTA between the UK and Netherlands was first signed in 1967 and has been amended several times since then. The most recent update to the agreement was signed in 2018, and it applies from January 1st, 2020.
The DTA addresses various types of income, including:
1. Income from employment
The agreement provides that income from employment should be taxed in the country where the work is performed. However, there are exceptions for employment on ships and aircraft, which are taxed according to the residency rules.
2. Business profits
The DTA provides that business profits should be taxed in the country where the business is located. However, there are exceptions for certain cases, such as when the business operates through a permanent establishment in the other country.
3. Dividends
The agreement provides that dividends paid by a company resident in one country to a resident of the other country should be taxed in the country where the recipient is resident. However, there are certain conditions that must be met for this exemption to apply.
4. Interest
The DTA provides that interest paid by a resident of one country to a resident of the other country should be taxed only in the recipient`s country of residence.
5. Royalties
The agreement provides that royalties paid by a resident of one country to a resident of the other country should be taxed only in the recipient`s country of residence.
In addition to these provisions, the DTA also includes a mechanism for resolving disputes between the two countries` tax authorities and preventing tax evasion.
Overall, the Double Taxation Agreement between the UK and the Netherlands is an important agreement that helps businesses and individuals avoid double taxation. It is essential for anyone who works, invests or does business in these two countries to understand its provisions and how they can benefit from it.
