The Double Taxation Relief (Taxes on Income) (Falkland Islands) Order 1992

SCHEDULE SUPPLEMENTARY ARRANGEMENT AMENDING THE ARRANGEMENT BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE GOVERNMENT OF THE FALKLAND ISLANDS FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND CAPITAL GAINS

The Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Falkland Islands;

Desiring to amend the Arrangement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains (hereinafter referred to as “the Arrangement”);

Have agreed as follows:

1.  The Arrangement shall be amended by the substitution for sub-paragraph (2) of Paragraph 26 of the following new sub-paragraph—

“(2) For the purposes of sub-paragraph (1) of this Paragraph, the term “Falkland Islands tax payable” shall be deemed to include any amount which would have been payable as Falkland Islands tax for any year but for an exemption or reduction of tax granted for that year or any part thereof under—

(a) Section 3 of the Taxes and Duties (Special Exemptions) Ordinance 1987 so far as this provision was in force on, and has not been modified since, the date of entry into force of the Supplementary Arrangement to this Arrangement, or has been modified only in minor respects so as not to affect its general character; or

(b) any other provision which may subsequently be made granting an exemption or reduction of tax which is agreed by the competent authorities of the territories to be of a substantially similar character, if it has not been modified thereafter or has been modified only in minor respects so as not to affect its general character.

Provided that relief from United Kingdom tax shall not be given by virtue of this paragraph in respect of income from any source if the income arises in a period starting more than ten years after the exemption from, or reduction of, Falkland Islands tax was first granted in respect of that source.”

2.  Each of the territories shall notify to the other through diplomatic channels the completion of the procedures required by its law for the bringing into force of this Supplementary Arrangement. This Supplementary Arrangement shall enter into force on the date of the later of these notifications and shall thereupon have effect:

(a) in the United Kingdom:

(i) in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6th April 1987;

(ii) in respect of corporation tax, for any financial year beginning on or after 1st April 1987; and

(b) in the Falkland Islands:

• in respect of income tax for any year of assessment beginning on or after 1st January 1987.

3.  Notwithstanding paragraph 2 of this Supplementary Arrangement, where any greater relief from tax would have been afforded by any provision of the Arrangement than is due under the Arrangement as amended by this Supplementary Arrangement, any such provision as aforesaid shall continue to have effect in the United Kingdom for any year of assessment or financial year beginning before the entry into force of this Supplementary Arrangement, and in the Falkland Islands for any year of assessment beginning before the entry into force of this Supplementary Arrangement.