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Economy and Banking Sector of the United Kingdom

Withholding Tax

Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.

Withholding Tax Rates in the United Kingdom: 0.0 - 20.0%

Withholding tax rates applied on payments of interest and dividends in United Kingdom are shown in Table 1.

Dividends Interest
Natural Persons (residents) 0.0 %20.0 %
Natural Persons (non-residents) 0.0 %0.0 %
Table 1. Withholding tax rates in United Kingdom.

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

DTAs of the United Kingdom: 127 Signed Agreements

United Kingdom signed DTAs which already came info force with the following jurisdictions:

AL Albania
AR Argentina
AM Armenia
AU Australia
AT Austria
AZ Azerbaijan
BH Bahrain
BD Bangladesh
BB Barbados
BY Belarus
BE Belgium
BZ Belize
BO Bolivia
BA Bosnia and Herzegovina
BW Botswana
BN Brunei Darussalam
BG Bulgaria
CA Canada
KY Cayman Islands
CL Chile
CN China
CI Cote D'Ivoire
HR Croatia
CY Cyprus
CZ Czech Republic
DK Denmark
EG Egypt
EE Estonia
ET Ethiopia
FK Falkland Islands (Malvinas)
FO Faroe Islands
FJ Fiji
FI Finland
FR France
GM Gambia
GE Georgia
DE Germany
GH Ghana
GR Greece
GD Grenada
GG Guernsey
GY Guyana
HK Hong Kong
HU Hungary
IS Iceland
IN India
ID Indonesia
IE Ireland
IM Isle of Man
IL Israel
IT Italy
JM Jamaica
JP Japan
JE Jersey
JO Jordan
KZ Kazakhstan
KE Kenya
KI Kiribati
KR Korea, Republic of
KW Kuwait
LV Latvia
LS Lesotho
LY Libya
LI Liechtenstein
LT Lithuania
LU Luxembourg
MK Macedonia
MW Malawi
MY Malaysia
MT Malta
MU Mauritius
MX Mexico
MD Moldova, Republic of
MN Mongolia
ME Montenegro
MS Montserrat
MA Morocco
MM Myanmar
NA Namibia
NL Netherlands
NZ New Zealand
NG Nigeria
NO Norway
OM Oman
PK Pakistan
PA Panama
PG Papua New Guinea
PH Philippines
PL Poland
PT Portugal
QA Qatar
RO Romania
RU Russian Federation
SA Saudi Arabia
RS Serbia
SL Sierra Leone
SG Singapore
SK Slovakia
SI Slovenia
SB Solomon Islands
ZA South Africa
ES Spain
LK Sri Lanka
SD Sudan
SZ Swaziland
SE Sweden
CH Switzerland
TJ Tajikistan
TH Thailand
TT Trinidad and Tobago
TN Tunisia
TR Turkey
TM Turkmenistan
TV Tuvalu
UG Uganda
UA Ukraine
US United States
UZ Uzbekistan
VE Venezuela
VN Vietnam
ZM Zambia
ZW Zimbabwe

There are also several agreements between United Kingdom and other jurisdictions which were signed but haven't yet come into force:

BY Belarus
CN China
IS Iceland
ZM Zambia

Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Exchange on Request: 25 Signed Agreements

United Kingdom signed TIEAs which already came info force with the following jurisdictions :

AI Anguilla
AG Antigua and Barbuda
AW Aruba
BS Bahamas
BZ Belize
BM Bermuda
VG British Virgin Islands
DM Dominica
GI Gibraltar
GD Grenada
GG Guernsey
IM Isle of Man
JE Jersey
LR Liberia
LI Liechtenstein
KN Saint Kitts and Nevis
LC Saint Lucia
VC Saint Vincent and The Grenadines
SM San Marino
TC Turks and Caicos Islands

There are also several agreements between United Kingdom and other jurisdictions which was signed but haven't yet come into force:

BR Brazil
CW Curacao
MH Marshall Islands
SX Sint Maarten (Dutch part)
UY Uruguay

Automatic Exchange: Starts in September 2017

United Kingdom signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.

Automatic Excnange: 49 Bilateral Agreements to Receive Information

the United Kingdom has signed bilateral agreements with 49 jurisdictions to automatically receive information:

AD Andorra
AR Argentina
AT Austria
BE Belgium
BQ Bonaire, Saint Eustatius and Saba
BG Bulgaria
CO Colombia
HR Croatia
CY Cyprus
CZ Czech Republic
DK Denmark
EE Estonia
FO Faroe Islands
FI Finland
FR France
DE Germany
GI Gibraltar
GR Greece
GL Greenland
GG Guernsey
HU Hungary
IS Iceland
IN India
IE Ireland
IM Isle of Man
IT Italy
JE Jersey
KR Korea, Republic of
LV Latvia
LI Liechtenstein
LT Lithuania
LU Luxembourg
MT Malta
MX Mexico
MC Monaco
NL Netherlands
NO Norway
PL Poland
PT Portugal
RO Romania
SM San Marino
SC Seychelles
SG Singapore
SK Slovakia
SI Slovenia
ZA South Africa
ES Spain
SE Sweden
CH Switzerland

Automatic Excnange: 55 Bilateral Agreements to Send Information

the United Kingdom has signed bilateral agreements with 55 jurisdictions to automatically send information:

AD Andorra
AI Anguilla
AR Argentina
AT Austria
BE Belgium
BM Bermuda
BQ Bonaire, Saint Eustatius and Saba
VG British Virgin Islands
BG Bulgaria
KY Cayman Islands
CO Colombia
HR Croatia
CY Cyprus
CZ Czech Republic
DK Denmark
EE Estonia
FO Faroe Islands
FI Finland
FR France
DE Germany
GI Gibraltar
GR Greece
GL Greenland
GG Guernsey
HU Hungary
IS Iceland
IN India
IE Ireland
IM Isle of Man
IT Italy
JE Jersey
KR Korea, Republic of
LV Latvia
LI Liechtenstein
LT Lithuania
LU Luxembourg
MT Malta
MX Mexico
MC Monaco
MS Montserrat
NL Netherlands
NO Norway
PL Poland
PT Portugal
RO Romania
SM San Marino
SC Seychelles
SG Singapore
SK Slovakia
SI Slovenia
ZA South Africa
ES Spain
SE Sweden
CH Switzerland
TC Turks and Caicos Islands

Further Information

FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

FATCA Status in the United Kingdom
IGA in effect since 12 September 2012, Model 1

United Kingdom has FATCA agreement with the U.S. in effect since 12 September 2012 (Intergovernmental Agreement Model 1). Financial institutions operating in United Kingdom are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: the United Kingdom's financial accounts hold in U.S. financial institutions will be reported to the United Kingdom's authorities.

Further Information