Double Taxation Relief (Taxes on Income) (The United States of America) Order 1980
| Jurisdiction | UK Non-devolved |
| Citation | SI 1980/568 |
| Year | 1980 |
1980 No. 568
INCOME TAX
The Double Taxation Relief (Taxes on Income) (The United States of America) Order 198021stApril 1980
At the Court at Windsor Castle, the 21st day of April 1980.
Present,
The Queen's Most Excellent Majesty in Council
Whereas a draft of this Order was laid before the House of Commons in accordance with the provisions of section 497(8) of the Income and Corporation Taxes Act 1970(a), and an Address has been presented to Her Majesty by that House praying that an Order may be made in the terms of that draft:
Now, therefore, Her Majesty, in exercise of the powers conferred upon Her by section 497 of the Income and Corporation Taxes Act 1970, and of all other powers enabling Her in that behalf is pleased, by and with the advice of her Privy Council, to order, and it is hereby ordered, as follows:—
1. This Order may be cited as the Double Taxation Relief (Taxes on Income) (The United States of America) Order 1980.
2. It is hereby declared—
(a) that the arrangements specified in the Convention set out in Part I of the Schedule to this Order and the Protocols set out in Parts II, III and IV of that Schedule have been made with the Government of the United States of America with a view to affording relief from double taxation in relation to income tax. corporation tax or capital gains tax and taxes of a similar character imposed by the laws of the United States of America; and
(b) that it is expedient that those arrangements should have effect.
N. E. Leigh Clerk of the Privy Council.
(a) 1970 c. 10; Section 497 was amended and extended by sections 98(2) and 100(1) of the Finance Act 1972 (c. 41), section 10 of the Capital Gains Tax Act 1979 (c. 14) and section 16 of the Finance (No. 2) Act 1979 (c. 47).
SCHEDULE
PART I
CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND CAPITAL GAINS.
The Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the United States of America;
Desiring to conclude a new Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains;
Have agreed as follows:
ARTICLE 1
Personal scope
(1) Except as specifically provided herein, this Convention is applicable to persons who are residents of one or both of the Contracting States.
(2) A corporation which is both a resident of the United Kingdom within the meaning of paragraph (1)(a)(ii) of Article 4 (Fiscal residence), and a resident of the United States within the meaning of paragraph (1)(b)(ii) of Article 4 shall not be entitled to claim any relief or exemption from tax provided by this Convention except that such corporation may claim the benefits of Article 23 (Elimination of double taxation) with respect to the petroleum revenue tax referred to in paragraph (2)(b) of Article 2 (Taxes covered), of Article 24 (Non-discrimination) and of Article 28 (Entry into force).
(3) Notwithstanding any provision of this Convention except paragraph 4 of this Article, a Contracting State may tax its residents (as determined under Article 4 (Fiscal residence)) and its nationals as if this Convention had not come into effect.
(4) Nothing in paragraph (3) of this Article shall affect the application by a Contracting State of:
(a) Articles 9 (Associated enterprises), 23 (Elimination of double taxation), 24 (Non-discrimination), and 25 (Mutual agreement procedure); and
(b) Articles 19 (Government service), 20 (Teachers), 21 (Students and trainees) and 27 (Effect on diplomatic and consular officials and domestic laws), with respect to individuals who are neither nationals of, nor have immigrant status in, that State.
ARTICLE 2
Taxes covered
(1) This Convention shall apply to taxes on income imposed by each Contracting State and as hereinafter provided to taxes imposed by its political subdivisions or local authorities.
(2) The existing taxes to which this Convention shall apply are:
(a) in the case of the United States, the Federal income taxes imposed by the Internal Revenue Code and the tax on insurance premiums paid to foreign insurers; but (except as provided in paragraph (6) of Article 10 (Dividends)) excluding the accumulated earnings tax and the personal holding company tax. The foregoing taxes covered are hereinafter referred to as "United States tax";
(b) in the case of the United Kingdom, the income tax, the capital gains tax, the corporation tax and the petroleum revenue tax. The foregoing taxes covered are hereinafter referred to as "United Kingdom tax"; and
(c) for the purposes of paragraph (4) of Article 9 (Associated enterprises), taxes imposed on income by political subdivisions or local authorities of a Contracting State.
(3) This Convention shall also apply to any identical or substantially similar taxes which are imposed by a Contracting State or its political subdivisions or local authorities after the date of signature of this Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any changes which have been made in their respective taxation laws.
(4) For the purpose of Article 24 (Non-discrimination), this Convention shall also apply to taxes of every kind and description imposed by each Contracting State, or by its political subdivisions or local authorities.
ARTICLE 3
General definitions
(1) In this Convention, unless the context otherwise requires:
(a) the term "corporation" means a United States corporation, a United Kingdom corporation, or any body corporate or other entity of a third State which is treated as a body corporate for tax purposes by both Contracting States;
(b) (i) the term "United States corporation" means a corporation (or any unincorporated entity treated as a corporation for United States tax purposes) which is created or organised under the laws of the United States or any State thereof or the District of Columbia; and
(ii) the term "United Kingdom corporation" means any body corporate or unincorporated association created or organised under the laws of the United Kingdom, but does not include a partnership, a local authority, or a local authority association;
(c) the term "person" includes an individual, a corporation, a partnership, an estate, a trust and any other body of persons;
(d) the term "enterprise of a Contracting State" means an industrial or commercial undertaking carried on by a resident of a Contracting State;
(e) the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;
(f) the term "competent authority" means:
(i) in the case of the United States, the Secretary of the Treasury or his delegate, and
(ii) in the case of the United Kingdom, the Commissioners of Inland Revenue or their authorised representative;
(g) (i) the term "United States" means the United States of America; and
(ii) when used in a geographical sense, the States thereof and the District of Columbia.
Such term also includes:
(aa) the territorial sea thereof, and
(bb) the seabed and subsoil of the submarine areas adjacent to the coast thereof, but beyond the territorial sea, over which the United States exercises sovereign rights, in accordance with international law, for the purpose of exploration for and exploitation of the natural resources of such areas, but only to the extent that the person, property, or activity to which the Convention is being applied is connected with such exploration or exploitation;
(h) (i) the term "United Kingdom" means Great Britain and Northern Ireland, including any area outside the territorial sea of the United Kingdom which in accordance with international law has been or may hereafter be designated, under the laws of the United Kingdom concerning the Continental Shelf, as an area within which the rights of the United Kingdom with respect to the seabed and subsoil and their natural resources may be exercised;
(i) the term "Contracting State" means the United States or the United Kingdom, as the context requires;
(j) the term "third State" means any State or territory other than the United States or the United Kingdom and the term "enterprise of a third State" shall be construed accordingly;
(k) the term "nationals" means:
(i) in relation to the United Kingdom, all citizens of the United Kingdom and Colonies, British subjects under sections 2, 13(1) or 16 of the British Nationality Act 1948(a), and British subjects by virtue of section 1 of the British Nationality Act 1965(b), provided they are patrial within the meaning of the Immigration Act 1971(c), so far as these provisions are in force on the date of entry into force of this Convention or have been modified only in minor respects so as not to affect their general character;
(ii) in relation to the United States, United States citizens.
(2) As regards the application of this Convention by a Contracting State any term not otherwise defined shall, unless the context otherwise requires and subject to the provisions of Article 25 (Mutual agreement procedure), have the meaning which it has under the laws of that Contracting State relating to the taxes which are the subject of this Convention.
ARTICLE 4
Fiscal residence
(1) For the purpose of this Convention:
(a) the term "resident of the United Kingdom" means:
(i) any person, other than a corporation, resident in the United Kingdom for the purposes of United Kingdom tax; but in the case of a partnership, estate, or trust, only to the extent that the income derived by such partnership, estate, or trust is subject to United Kingdom tax as the income of a resident, either in its hands or in the hands of...
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