UK signs new tax treaties with Norway and Spain

New comprehensive double taxation conventions with Norway and Spain were signed on 14 March.

The UK/Norway convention provides for zero withholding tax on dividends received by companies and pension schemes having an interest of at least 10% in the paying company; the latest OECD provisions on business profits, exchange of information, assistance in collection and arbitration; and taxation of pensions at at source.

The UK/Spain convention has ‘substantial benefits’ for companies, pension schemes and individuals, HMRC said. ‘The dividend withholding tax rate in the existing treaty is 15% for portfolio investors and this will be reduced to 10% for portfolio investors and to zero for direct investors and pension schemes. The withholding tax rates for interest and royalties are also reduced to zero.’ The new convention also clarifies access to treaty benefits by participants in fiscally transparent entities, and includes an arbitration provision and updated anti-abuse measures, HMRC added.