The following Tax guidance note Produced in partnership with David Klass of Hunton Andrews Kurth provides comprehensive and up to date legal information covering:
Brexit: As of exit day (31 January 2020) the UK is no longer an EU Member State. However, in accordance with the Withdrawal Agreement, the UK has entered an implementation period, during which it continues to be subject to EU law. This has an impact on this Practice Note. For further guidance, see Practice Note: Brexit—UK tax consequences.
Article 11 of the OECD model convention is concerned with the taxation of interest paid cross border. In particular, it deals with the allocation of taxing rights between:
the state of residence of the person receiving payment, which will be referred to as the recipient state, and
the state of residence of the person making the payment, which will be referred to as the source state
This Practice Note considers:
the meaning of interest in a double tax treaty or convention (DTT) context
the OECD model convention approach to the taxation of interest
variations on this approach in DTTs
the interaction between the DTT approach and the EU Interest and Royalties Directive, and
the practical contexts in which an assessment of this article will arise
Other types of passive income, which are dealt with in similar ways by DTTs, are explained in Practice Notes:
Dividend articles in double tax treaties
Royalties articles in double tax treaties
Some of the benefits
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