The Double Taxation Relief and International Tax Enforcement (Panama) Order 2013

EXPLANATORY NOTE

(This note is not part of the Order)

The Schedule to this Order contains a Convention and a Protocol (“the Arrangements”) between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Panama dealing with the avoidance of double taxation and the prevention of fiscal evasion. This Order brings the Arrangements into effect.

The Arrangements aim to eliminate the double taxation of income and gains arising in one country and paid to residents of the other country. This is done by allocating the taxing rights that each country has under its domestic law over the same income and gains, and/or by providing relief from double taxation. There are also specific measures which combat discriminatory tax treatment and provide for assistance in international tax enforcement.

Article 1 provides for citation.

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

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

(a) in the United Kingdom:

(i) in respect of withholding taxes, on income derived on or after 1 January of the calendar year following the date of entry into force;

(ii) in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6 April next following the date of entry into force;

(iii) in respect of corporation tax, for any financial year beginning on or after 1 April next following the date of entry into force; and

(b) in Panama:

(i) in respect of withholding taxes, on income derived on or after 1 January of the calendar year following the date of entry into force;

(ii) in respect of income taxes and other taxes (other than withholding taxes), for any tax year beginning on or after 1 January of the calendar year following the date of entry into force.

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

A Tax Information and Impact Note has not been produced for this Order as it gives effect to a previously announced policy to enact a double taxation agreement.