It’s a small world

KEY POINTS

• OECD model is the basis for most UK agreements.
• Key tests for residence.
• Employment income includes share options and bonuses.
• What counts as a relevant day.

Double tax treaties are designed to serve three purposes. These are to protect against the risk of double taxation where the same income is taxable in two states to help provide certainty in cross-border dealings and to prevent tax discrimination against UK business interests abroad.

The UK has the largest network of double tax treaties covering more than 100 countries.

Broadly there are two bases for tax agreement the Organisation for Economic Cooperation and Development (OECD) model first published in 1963 (latest version 22 July 2010) and the United Nations (UN) model first published in 1980.

The main difference between these...