Royalties articles in double tax treaties
Produced in partnership with David Klass of Hunton Andrews Kurth
Royalties articles in double tax treaties

The following Tax practice note produced in partnership with David Klass of Hunton Andrews Kurth provides comprehensive and up to date legal information covering:

  • Royalties articles in double tax treaties
  • Beneficial ownership
  • Meaning of royalties
  • Variations in the UN model
  • Model convention tax treatment of royalties
  • Special rules for permanent establishments
  • Special relationships
  • Variations on the model convention
  • Variations in the definition of royalties
  • Variation in rates of withholding tax
  • More...

Royalties articles in double tax treaties

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for Tax?

FORTHCOMING CHANGE: Finance Bill 2021 provides for the repeal, for interest and royalty payments made on or after 1 June 2021, of the UK provisions that implemented the EU Interest and Royalties Directive (IRD), ie:

  1. sections 757–767 of the Income Tax (Trading and Other Income) Act 2005 and related regulations, Exemption from Tax for Certain Interest Payments Regulations 2004, SI 2004/2622, and

  2. sections 914–917 of the Income Tax Act 2007

However, an interest or royalty payment made on or after 3 March 2021 is also caught if it is made in disqualifying circumstances, ie if it is made in connection with arrangements a main purpose of which is to ensure that the UK provisions giving effect to the IRD continue to apply to it.

Article 12 of the OECD model tax convention (OECD model convention) is concerned with

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