UK Enacts Double Taxation Relief Order with Ecuador
December 19, 2024
On December 19, 2024, the UK government issued the Double Taxation Relief and International Tax Enforcement (Ecuador) Order 2024 (the “Order”). The Order took effect upon its publication in the UK’s official gazette, The London Gazette.
Purpose of the Order
The Order is intended to implement a tax treaty between the UK and Ecuador, which was signed on August 22, 2023. The treaty seeks to prevent double taxation and promote international cooperation in tax matters.
Key Provisions
The main provisions of the Order include:
- Relief from double taxation: The Order provides for relief from double taxation on income and capital gains arising in either the UK or Ecuador.
- Exemption method: The relief from double taxation is based on the exemption method, under which income or gains are exempt from taxation in the taxpayer’s country of residence.
- Withholding taxes: The Order sets out the withholding tax rates applicable to dividends, interest, and royalties paid between the two countries.
- Exchange of information: The Order provides for the exchange of information between the UK and Ecuador to prevent tax evasion and fraud.
Eligibility for Relief
Individuals and companies that are resident in either the UK or Ecuador are eligible for the double taxation relief provided by the Order.
Implementation
The Order came into effect on the date of publication and will apply to taxes for the tax year 2025-26 onwards.
Significance
The Order is significant because it strengthens the economic and tax cooperation between the UK and Ecuador. It provides businesses and individuals with certainty regarding the tax treatment of their income and gains earned in both countries.
Conclusion
The Double Taxation Relief and International Tax Enforcement (Ecuador) Order 2024 is an important piece of legislation that reflects the UK’s commitment to preventing double taxation and promoting international tax cooperation. The Order will benefit businesses and individuals engaged in cross-border activities between the UK and Ecuador.
The Double Taxation Relief and International Tax Enforcement (Ecuador) Order 2024
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