The UK has agreed protocols to the existing double taxation agreements with Sweden and Germany. The protocols are set out in the following Orders:
The Double Taxation Relief (Sweden) Order, SI 2021/633, brings into effect arrangements set out in the Protocol agreed between the UK and Sweden which amends the existing double tax treaty between the two countries (SI 2015/1891).
The 2021 Protocol introduces provisions recommended by the OECD/G20 BEPS project (outside of the multilateral instrument approach of revising agreements).
The changes include:
amendments to the pre-amble to reflect the anti-treaty shopping focus of the BEPS project; and
the insertion of a new Article 27A with a ‘principal purpose test’ for the prevention of treaty abuse (and corresponding adjustments to remove anti-abuse provisions in other articles which are no longer required, eg in relation to dividends).
The changes will have effect in the UK broadly from the tax year following the date on which the Protocol enters into force.
The Double Taxation Relief (Federal Republic of Germany) Order, SI 2021/634, brings into effect arrangements set out in the Protocol which amends the UK-Germany double tax treaty.
The Germany protocol also addresses treaty abuse, via the following changes:
amendments to the title and pre-amble to reflect the anti-treaty shopping focus of the BEPS project; and
the insertion of a new Article 30A with a ‘principal purpose test’ for the prevention of treaty abuse (with corresponding adjustments to individual articles).
The changes will have effect in the UK broadly from the next tax year following the year in which the protocol comes into force.
The UK has agreed protocols to the existing double taxation agreements with Sweden and Germany. The protocols are set out in the following Orders:
The Double Taxation Relief (Sweden) Order, SI 2021/633, brings into effect arrangements set out in the Protocol agreed between the UK and Sweden which amends the existing double tax treaty between the two countries (SI 2015/1891).
The 2021 Protocol introduces provisions recommended by the OECD/G20 BEPS project (outside of the multilateral instrument approach of revising agreements).
The changes include:
amendments to the pre-amble to reflect the anti-treaty shopping focus of the BEPS project; and
the insertion of a new Article 27A with a ‘principal purpose test’ for the prevention of treaty abuse (and corresponding adjustments to remove anti-abuse provisions in other articles which are no longer required, eg in relation to dividends).
The changes will have effect in the UK broadly from the tax year following the date on which the Protocol enters into force.
The Double Taxation Relief (Federal Republic of Germany) Order, SI 2021/634, brings into effect arrangements set out in the Protocol which amends the UK-Germany double tax treaty.
The Germany protocol also addresses treaty abuse, via the following changes:
amendments to the title and pre-amble to reflect the anti-treaty shopping focus of the BEPS project; and
the insertion of a new Article 30A with a ‘principal purpose test’ for the prevention of treaty abuse (with corresponding adjustments to individual articles).
The changes will have effect in the UK broadly from the next tax year following the year in which the protocol comes into force.
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