What is a double taxation agreement?
Answered 17 March 2026
Here is a comprehensive answer based on the available sources.
What is a Double Taxation Agreement?
What the law says
In UK legislation, "double taxation arrangements" means arrangements which have effect under section 2(1) of TIOPA 2010 — formally described as "double taxation relief by agreement with territories outside the United Kingdom". These arrangements are given legal effect by Order in Council and may include arrangements that modify the effect of earlier arrangements.
HMRC guidance / practice
A Double Taxation Agreement (DTA) — also called a Double Taxation Convention or Double Taxation Arrangement — is a bilateral treaty negotiated between the UK and another country to ensure that individuals and businesses do not pay tax twice on the same income.
Key features include:
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Allocation of taxing rights: Each agreement sets out which country has the right to collect tax on different types of income. As confirmed by case law, "double taxation agreements allocate taxing rights between the contracting states".
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Residence tie-breakers: Each agreement includes a series of tests to determine which country's residence takes precedence in cases of dual residence.
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Relief from UK tax: When an individual is resident in a country with which the UK has a DTA, they may be able to claim relief from UK tax on certain types of UK-source income. The precise conditions vary by treaty.
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Scope: The UK has negotiated DTAs with more than 100 countries. Double taxation relief is also available unilaterally (without a treaty) under TIOPA 2010.
Terminology: The precise term used depends on the treaty:
- Double Taxation Convention — the most commonly used modern term
- Double Taxation Agreement — found in older treaties, particularly with some Commonwealth countries
- Double Taxation Arrangement — used for treaties with UK independent territories (e.g. the Falkland Islands)
Terms vary by country: The terms of each agreement differ, so it is important to consult the correct agreement in each case. A summary of the main provisions can be found in HMRC's DT Digest.
Citation sources
The legislation applies only where there is a scheme or arrangement that is entered into with tax avoidance as its main or one of its main purposes. It does not apply to anyone who has entered into transactions for wholly bona fide commercial purposes. Where it does apply, UK taxes are reduced by a just and reasonable amount of credit for foreign tax. Double taxation relief is provided for in UK tax legislation in accordance with arrangements made under bilateral tax treaties, and may also be gi
Part 2 Charge to corporation tax: basic provisions Chapter 1 The charge to corporation tax General scheme of corporation tax Arrangements for avoiding tax 5A 1 Subsection (3) applies if a company has entered into an arrangement the main purpose or one of the main purposes of which is to obtain a relevant tax advantage for the company. 2 In subsection (1) the reference to obtaining a relevant tax advantage includes obtaining a relevant tax advantage by virtue of any provisions of double taxation
Where an individual has income from a source in one country and is resident in another, the individual may be liable to tax in both countries under their tax laws. To avoid 'double taxation' the United Kingdom has negotiated double taxation (DT) treaties with more than 100 countries. Each treaty is called either a 'Double Taxation Agreement' or a 'Double Taxation Convention', depending on the wording of the treaty. When the individual is a resident of a country with which the UK has a double tax
In this INTM module, treaties about double taxation are referred to as Double TaxationAgreements or DTAs. However, the precise terminology is as follows Double Taxation Convention - nowadays the most commonly used term Double Taxation Agreement - tends to be found in older treaties with some Commonwealth countries. Exceptionally, the treaty between the UK and Taiwan is a Double Taxation Agreement. Double Taxation Arrangement - used for treaties with an independent territory of the UK, for exampl
A person who is resident in the UK but is treated as non-resident under double taxation arrangements is treated as not being in the UK. The UK has double taxation agreements with many countries to ensure that people do not pay tax twice on the same income. Each agreement will set out which country has the right to collect tax on different types of income and a series of tests to help determine which country’s residence take precedence in the case of a dual residence situation. The terms of the a
PART 1 Direct taxes Double taxation relief Double taxation arrangements specified by Order in Council 32 1 In section 2 of TIOPA 2010 (giving effect to arrangements made in relation to other territories) after subsection (1) insert— 1A For the purposes of this section, arrangements made with a view to affording relief from double taxation include any arrangements which modify the effect of arrangements so made. 2 In section 3 of that Act (arrangements may include retrospective or supplementary p