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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 person, resident 0.0 %20.0 %
Natural person, non-resident 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 (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):

 Albania (Dec 2013)
 Argentina
 Armenia
 Australia
 Austria
 Azerbaijan
 Bahrain
 Bangladesh
 Barbados
 Belarus
 Belgium
 Belize
 Bolivia
 Bosnia and Herzegovina
 Botswana
 Brunei Darussalam
 Bulgaria
 Canada
 Cayman Islands
 Chile
 China
 Cote D'Ivoire
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Egypt
 Estonia
 Ethiopia (Feb 2013)
 Falkland Islands (Malvinas)
 Faroe Islands
 Fiji
 Finland
 France
 Gambia
 Georgia
 Germany
 Ghana
 Greece
 Grenada
 Guernsey
 Guyana
 Hong Kong
 Hungary
 Iceland
 India
 Indonesia
 Ireland
 Isle of Man
 Israel
 Italy
 Jamaica
 Japan
 Jersey
 Jordan
 Kazakhstan
 Kenya
 Kiribati
 Korea, Republic of
 Kuwait
 Latvia
 Lesotho
 Libya
 Liechtenstein
 Lithuania
 Luxembourg
 Macedonia
 Malawi
 Malaysia
 Malta
 Mauritius
 Mexico
 Moldova, Republic of
 Mongolia
 Montenegro
 Montserrat
 Morocco
 Myanmar
 Namibia
 Netherlands
 New Zealand
 Nigeria
 Norway (Dec 2013)
 Oman
 Pakistan
 Panama (Dec 2013)
 Papua New Guinea
 Philippines
 Poland
 Portugal
 Qatar
 Romania
 Russian Federation
 Saudi Arabia
 Serbia
 Sierra Leone
 Singapore
 Slovakia
 Slovenia
 Solomon Islands
 South Africa
 Spain (Jun 2014)
 Sri Lanka
 Sudan
 Swaziland
 Sweden
 Switzerland
 Tajikistan
 Thailand
 Trinidad and Tobago
 Tunisia
 Turkey
 Turkmenistan
 Tuvalu
 Uganda
 Ukraine
 United States
 Uzbekistan
 Venezuela
 Vietnam
 Zambia
 Zimbabwe

There are also several agreements between United Kingdom and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 1 January 2013 of signing the agreement is given in brackets):

 Belarus
 China
 Iceland (Dec 2013)
 Zambia (Feb 2014)

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 (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):

 Anguilla
 Antigua and Barbuda
 Aruba
 Bahamas
 Belize
 Bermuda
 British Virgin Islands
 Dominica
 Gibraltar
 Grenada
 Guernsey
 Isle of Man
 Jersey
 Liberia
 Liechtenstein
 Saint Kitts and Nevis
 Saint Lucia
 Saint Vincent and The Grenadines
 San Marino
 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 (for agreements signed after 1 January 2013 of signing the agreement is given in brackets):

 Brazil
 Curacao
 Marshall Islands
 Sint Maarten (Dutch part)
 Uruguay (Oct 2013)

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:

 Andorra
 Argentina
 Austria
 Belgium
 Bonaire, Saint Eustatius and Saba
 Bulgaria
 Colombia
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Estonia
 Faroe Islands
 Finland
 France
 Germany
 Gibraltar
 Greece
 Greenland
 Guernsey
 Hungary
 Iceland
 India
 Ireland
 Isle of Man
 Italy
 Jersey
 Korea, Republic of
 Latvia
 Liechtenstein
 Lithuania
 Luxembourg
 Malta
 Mexico
 Monaco
 Netherlands
 Norway
 Poland
 Portugal
 Romania
 San Marino
 Seychelles
 Singapore
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 Switzerland

Automatic Excnange: 55 Bilateral Agreements to Send Information

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

 Andorra
 Anguilla
 Argentina
 Austria
 Belgium
 Bermuda
 Bonaire, Saint Eustatius and Saba
 British Virgin Islands
 Bulgaria
 Cayman Islands
 Colombia
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Estonia
 Faroe Islands
 Finland
 France
 Germany
 Gibraltar
 Greece
 Greenland
 Guernsey
 Hungary
 Iceland
 India
 Ireland
 Isle of Man
 Italy
 Jersey
 Korea, Republic of
 Latvia
 Liechtenstein
 Lithuania
 Luxembourg
 Malta
 Mexico
 Monaco
 Montserrat
 Netherlands
 Norway
 Poland
 Portugal
 Romania
 San Marino
 Seychelles
 Singapore
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 Switzerland
 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