Overview

This bill mandates the Chancellor of the Exchequer to consider the UK's overseas development aid goals when negotiating double taxation treaties with developing countries. It requires assessments of how these treaties impact poverty reduction, with annual reports to Parliament detailing their effects.

Description

The Double Taxation Treaties (Developing Countries) Bill aims to ensure that future double taxation treaties with developing countries support the UK's poverty reduction objectives. Key aspects include:

• Duty to Consider Poverty Reduction: The Chancellor must consider the impact of treaties on poverty when negotiating with developing nations.
• Pre-Signing Assessment and Report: Before signing a treaty, the Chancellor must assess and report to Parliament on how the treaty's terms support poverty reduction. This assessment will include analysis of tax revenue collection (capital gains, withholding, profit taxes, and the definition of "permanent establishment"), and the impact on foreign investment.
• List of Developing Countries: The Chancellor must publish a list of developing countries to which the bill applies, using various economic and development criteria from organizations like the UN, World Bank and IMF.
• Annual Reporting: The Chancellor must annually report to Parliament on the impact of existing double taxation treaties on poverty reduction, including an assessment of treaties significantly at variance with comparable treaties or no longer contributing to poverty reduction.

Government Spending

The bill doesn't directly involve government spending, but it could indirectly affect spending by influencing the design of double taxation treaties. The aim is to maximize the effectiveness of existing aid programs by aligning tax policy with development goals, potentially increasing the impact of aid. No specific figures regarding increased or decreased spending are provided in the bill.

Groups Affected

• Developing Countries: The bill could positively impact developing countries by ensuring that double taxation treaties maximize tax revenue for development and incentivize foreign investment.
• UK Businesses Operating in Developing Countries: The bill may affect UK businesses through changes in tax liabilities and investment incentives in developing nations.
• Chancellor of the Exchequer: The bill increases the Chancellor's responsibilities, requiring detailed assessments and reporting on double taxation treaties.
• Parliament: The bill enhances parliamentary oversight of double taxation treaties through annual reporting.

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