<p>2019 Gibraltar-U.K. Income and Capital Tax Agreement Available</p>

2019 Gibraltar-U.K. Income and Capital Tax Agreement Available

<p>Tax Analysts has obtained the text of the Gibraltar-United Kingdom income and capital tax agreement and exchange of notes signed October 10 by the U.K. and October 15 by Gibraltar.</p> <p>Under the agreement, dividends are exempt from tax. However, a 15 percent withholding tax rate applies if, other than where the beneficial owner of the dividends is a pension scheme, the dividends are paid out of income (including gains) derived from immovable property by an investment vehicle that distributes most of the income annually and whose income from the immovable property is tax exempt.</p> <p>Interest is taxable only in the beneficial owner's state of residence if at least one of the following conditions is met:</p> <ul> <li>the interest is beneficially owned by: <ul> <li>that other territory itself, one of its political subdivisions, local authorities, its central bank, or its statutory bodies;</li> <li>an individual;</li> <li>a company in whose principal class of shares there is substantial and regular trading on a recognized stock exchange;</li> <li>a company less than 25 percent of whose shares or other rights are owned by persons who are not residents of that other territory;</li> <li>a pension scheme;</li> <li>a bank or building society;</li> <li>any other financial institution unrelated to and dealing wholly independently with the payer; or</li> <li>any other person provided that the competent authority of the territory which has to grant the benefits determines that the establishment, acquisition or maintenance of that person, or the conduct of its operations, does not have as its principal purpose or one of its principal purposes to secure the benefits of article 11 (interest); or</li> </ul> </li> <li>the interest is paid by a territory, one of its political subdivisions, local authorities or statutory bodies.</li> </ul> <p>Royalties are taxable only in the beneficial owner's state of residence if at least one of the following conditions is met:</p> <ul> <li>the royalties are beneficially owned by: <ul> <li>the other territory itself, one of its political subdivisions, local governments, local authorities, or its statutory bodies;</li> <li>an individual;</li> <li>a company in whose principal class of shares there is substantial and regular trading on a recognized stock exchange;</li> <li>a company less than 25 percent of whose shares or other rights are owned by persons who are not residents of that other territory; or</li> <li>any other person provided that the competent authority of the territory which has to grant the benefits determines that the establishment, acquisition or maintenance of that person, or the conduct of its operations, does not have as its principal purpose or one of its principal purposes to secure the benefits of article 12 (royalties).</li> </ul> </li> </ul> <p>Gibraltar generally uses the credit method to eliminate double taxation, while the U.K. uses a combination of the credit and exemption methods.</p> <p>The agreement will enter into force once ratification instruments are exchanged. In Gibraltar, its withholding tax provisions will apply from the first day of the second month following entry into force and its income and corporation tax provisions will apply from July 1 following entry into force. In the U.K., its withholding tax provisions will apply from the first day of the second month following entry into force, its income and capital gains tax provisions will apply from April 6 following entry into force, and its corporation tax provisions will apply from April 1 following entry into force. Articles on exchange of information and assistance in tax collection will apply from the date of entry into force without regard to the tax period to which the matter relates. </p>

<p><a href="/lr/resolve/-/29qvg" title=" ">Prior Gibraltar release</a>.</p>

<p>The provisions of Article 25 (exchange of information) and Article 26 (assistance in the collection of taxes) apply from March 24, 2020, without regard to the tax period to which the matter relates.</p>

<p>May 1, 2020 (withholding tax); April 1, 2020 (corporation tax); April 6, 2020 (income tax and capital gains tax) (U.K.). May 1, 2020 (withholding tax); July 1, 2020 (income tax and corporation tax) (Gibraltar). See Article 29.</p>

<p>Tax Analysts has obtained the text of the Gibraltar-United Kingdom income and capital tax agreement and exchange of notes signed October 10 by the U.K. and October 15 by Gibraltar. </p>

Tax Analysts has obtained the text of the Gibraltar-United Kingdom income and capital tax agreement and exchange of notes signed October 10 by the U.K. and October 15 by Gibraltar. Under the agreement, dividends are exempt from tax. However, a 15 percent withholding tax rate applies if, other than where the beneficial owner of the dividends is a pension scheme, the dividends are paid out of income (including gains) derived from immovable property by an investment vehicle that distributes most of the income annually and whose income from the immovable property is tax exempt. Interest is taxable only in the beneficial owner's state of residence if at least one of the following conditions is met: the interest is beneficially owned by: that other territory itself, one of its political subdivisions, local authorities, its central bank, or its statutory bodies; an individual; a company in whose principal class of shares there is substantial and regular trading on a recognized stock exchange; a company less than 25 percent of whose shares or other rights are owned by persons who are not residents of that other territory; a pension scheme; a bank or building society; any other financial institution unrelated to and dealing wholly independently with the payer; or any other person provided that the competent authority of the territory which has to grant the benefits determines that the establishment, acquisition or maintenance of that person, or the conduct of its operations, does not have as its principal purpose or one of its principal purposes to secure the benefits of article 11 (interest); or the interest is paid by a territory, one of its political subdivisions, local authorities or statutory bodies. Royalties are taxable only in the beneficial owner's state of residence if at least one of the following conditions is met: the royalties are beneficially owned by: the other territory itself, one of its political subdivisions, local governments, local authorities, or its statutory bodies; an individual; a company in whose principal class of shares there is substantial and regular trading on a recognized stock exchange; a company less than 25 percent of whose shares or other rights are owned by persons who are not residents of that other territory; or any other person provided that the competent authority of the territory which has to grant the benefits determines that the establishment, acquisition or maintenance of that person, or the conduct of its operations, does not have as its principal purpose or one of its principal purposes to secure the benefits of article 12 (royalties). Gibraltar generally uses the credit method to eliminate double taxation, while the U.K. uses a combination of the credit and exemption methods. The agreement will enter into force once ratification instruments are exchanged. In Gibraltar, its withholding tax provisions will apply from the first day of the second month following entry into force and its income and corporation tax provisions will apply from July 1 following entry into force. In the U.K., its withholding tax provisions will apply from the first day of the second month following entry into force, its income and capital gains tax provisions will apply from April 6 following entry into force, and its corporation tax provisions will apply from April 1 following entry into force. Articles on exchange of information and assistance in tax collection will apply from the date of entry into force without regard to the tax period to which the matter relates. 

<h4>Rate Table Instructions</h4> <ul> <li>You must enter a rate for each rate type</li> <li>Enter only one rate value per row</li> <li>You may leave the country columns blank if the rate is the same for both countries</li> <li>Country names (if entered) must exactly match the jurisdictions</li> <li>Leave the Partner Country column blank if you want the rate to apply to all partners of the Main Country</li> <li>Enter "n/a" in each rate row to hide the partner in the Main Country table</li> <li>Note that the same rates may apply for Main Country and Partner Country or the Main Country may apply different rates to the Partner Country</li> </ul> <table> <tbody> <tr><th> <div>Rate Type</div> (Dividends, Interest, Royalties)</th><th>Main Country</th><th>Partner Country</th><th>Rate</th><th>Footnote 1</th><th>Footnote 2</th><th>Footnote 3</th><th>Footnote 4</th></tr> <tr> <td>Dividends</td> <td> </td> <td> </td> <td>0/15</td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr> <td>Interest</td> <td> </td> <td> </td> <td>0/Domestic</td> <td>The 0 percent rate applies to interest beneficially owned by: the other territory itself, one of its political subdivisions, local authorities, central bank, or statutory bodies; an individual; a company in whose principal class of shares there is substantial and regular trading on a recognized stock exchange; a company less than 25 percent of whose shares are owned by persons who are not residents of that other territory; a pension scheme; a bank or buidling society; a financial institution unrelated to and dealing wholly independently with the payer; or any other persion provided the competent authority of the territory granting the benefits determines that the establishment, acquisition, or maintenance of that person, or the conduct of its operations, does not have as its principal purpose or one of its principal purposes to secure the benefits of Article 11; or to interest paid by a territory, one of its political subdivisions, local authorities, or statutory bodies. The domestic rate applies in other cases.</td> <td> </td> <td> </td> <td> </td> </tr> <tr> <td>Royalties</td> <td> </td> <td> </td> <td>0/Domestic</td> <td>The zero percent rate applies to royalties beneficially owned by: the other territory itself, one of its political subdivisions, local authorities, or statutory bodies; an individual; a company in whose principal class of shares there is substantial and regular trading on a recognized stock exchange; a company less than 25 percent of whose shares are owned by persons who are not residents of that other territory; or any other persion provided the competent authority of the territory granting the benefits determines that the establishment, acquisition, or maintenance of that person, or the conduct of its operations, does not have as its principal purpose or one of its principal purposess to secure the benefits of Article 12. The domestic rate applies in other cases.</td> <td> </td> <td> </td> <td> </td> </tr> </tbody> </table>

Gibraltar - United Kingdom: 2019 Income and Capital Tax Agreement, Final Protocol, and Notes

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2019 Gibraltar-U.K. Income and Capital Tax Agreement Available