Draft Order in Council laid before the House of Commons under section 5(2) of the Taxation (International and Other Provisions) Act 2010 and section 173(7) of the Finance Act 2006, for approval by resolution of that House.

2011 No.

Taxes

The Double Taxation Relief and International Tax Enforcement (Montserrat) Order 2011

Made[day] [Month] 2011

At the Court at Buckingham Palace, the [date] day of [Month] 2011

Present,

The Queen’s Most Excellent Majesty in Council

A draft of this Order was laid before the House of Commons in accordance with section 5(2) of the Taxation (International and Other Provisions) Act 20101 and section 173(7) of the Finance Act 20062 and approved by a resolution of that House.

Accordingly, Her Majesty, in exercise of the powers conferred upon Her by section 2 of the Taxation (International and Other Provisions) Act 2010 and section 173(1) to (3) of the Finance Act 2006, by and with the advice of Her Privy Council, orders as follows—

Citation1

This Order may be cited as the Double Taxation Relief and International Tax Enforcement (Montserrat) Order 2011.

Double taxation and international tax enforcement arrangements to have effect2

It is declared that—

a

the arrangement set out in Part 1 of the Schedule to this Order and specified in the Exchange of Letters set out in Part 2 of that Schedule, which varies the arrangement set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Montserrat) Order 19473 and amended by the arrangement set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Montserrat) Order 19684, has been made with the Government of Montserrat;

b

the arrangement has been made with a view to affording relief from double taxation in relation to income tax, corporation tax and taxes of a similar character imposed by the laws of Montserrat and for the purpose of assisting international tax enforcement; and

c

it is expedient that the arrangement should have effect.

NameClerk of the Privy Council

SCHEDULE

Article 2

EXPLANATORY NOTE

(This note is not part of the Order)

The Schedule to this Order contains an arrangement (“the New Arrangement”) which further amends an arrangement made in 1947 between the Government of the United Kingdom and the Government of Montserrat for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion With Respect to Taxes on Income (“the 1947 Arrangement”). The 1947 Arrangement was set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Montserrat) Order 1947 (S.I. 1947/2869) and subsequently amended by an arrangement set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Montserrat) Order 1968 (S.I. 1968/576). This Order brings the New Arrangement into effect.

Article 1 provides for citation.

Article 2 makes a declaration as to the effect and content of the New Arrangement.

The 1947 Arrangement aims to eliminate the double taxation of income arising in one country and paid to residents of the other country. It does this by allocating the taxing rights that each country has under its domestic law over the same income, and/or by providing relief from double taxation. It also provides for assistance in international tax enforcement.

The New Arrangement continues that approach by updating the exchange of information article in the 1947 Arrangement to bring it into line with the new international standard for exchange of information as set out in the current Model Tax Convention on Income and on Capital published by the Organisation for Economic Cooperation and Development (“OECD”) and to cover taxes of every kind and description imposed by the two countries.

The New Arrangement also amends the provisions on the taxation of pensions (other than government service pensions) and introduces a ‘mutual agreement procedure’ to allow the Governments to consult on the interpretation and application of the 1947 Arrangement. This is consistent with the OECD Model Tax Convention.

The New Arrangement will enter into force on the date of the later of the notifications by each country of the completion of its legislative procedures. It will take effect as follows:

a

in respect of the new paragraphs 2(1)(l), 14 and 14A of the 1947 Arrangement, on the date of entry into force; and

b

in respect of the new paragraph 10 of the 1947 Arrangement,

i

in the United Kingdom, in respect of income tax, for any year of assessment beginning on or after 6th April next following the date the New Arrangement enters into force; and

ii

in Montserrat, in respect of Montserrat tax, for any year of assessment beginning on or after 1st January next following the date the New Arrangement enters into force.

The date of entry into force will, in due course, be published in the London, Edinburgh and Belfast Gazettes.

A full and final Impact Assessment has not been produced for this Order as a negligible impact on the private or voluntary sectors is foreseen.