Countries with Double Taxation Agreements with the Uk Rates of Withholding Tax 2018

Double taxation agreements (DTAs) are legal treaties signed between countries to prevent taxpayers from being taxed twice on the same income. The United Kingdom has signed DTAs with over 130 countries, and in this article, we will discuss the countries with DTAs and the rates of withholding tax in 2018.

What is Withholding Tax?

Withholding tax is a tax levied on non-residents when they earn income from a country. The tax is withheld by the payer of the income and remitted to the government. The rate of withholding tax varies from country to country and is determined by the DTA signed between the two countries.

Countries with DTAs with the UK

The United Kingdom has signed DTAs with over 130 countries, including the United States, Australia, Canada, China, France, Germany, India, Japan, and Spain. These DTAs cover a wide range of income types, such as dividends, interest, royalties, and capital gains.

Rates of Withholding Tax in 2018

The rates of withholding tax vary depending on the country and the type of income. Here are the rates of withholding tax for some of the most commonly encountered income types in 2018:

– Dividends: The rate of withholding tax on dividends can range from 0% to 30%. For example, the rate is 0% for dividends paid from the UK to the United States, 15% for dividends paid from the UK to Canada, and 30% for dividends paid from the UK to India.

– Interest: The rate of withholding tax on interest can range from 0% to 30%. For example, the rate is 0% for interest paid from the UK to the United States, 10% for interest paid from the UK to Canada, and 15% for interest paid from the UK to India.

– Royalties: The rate of withholding tax on royalties can range from 0% to 30%. For example, the rate is 0% for royalties paid from the UK to Australia, 10% for royalties paid from the UK to Canada, and 20% for royalties paid from the UK to China.

– Capital Gains: The rate of withholding tax on capital gains can vary depending on the country. For example, there is no withholding tax on capital gains in the UK, but there may be in other countries. It is important to check the DTA to find out the rate of withholding tax on capital gains.

Conclusion

DTAs are important legal treaties that help prevent taxpayers from being taxed twice on the same income. The UK has signed DTAs with over 130 countries, and the rates of withholding tax vary depending on the country and the type of income. It is important to understand the DTA between two countries to determine the rate of withholding tax on a particular type of income. Consult with a tax professional to ensure compliance with tax laws across multiple jurisdictions.