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The Government has announced details of the UK's treaty negotiating priorities for the year to 31 March 2008.

There are currently more than 1,300 Double Taxation Conventions (DTCs) world-wide and the UK has one of the largest networks covering more than 100 countries. The Government reviews the UK's DTC priorities each year to ensure that the treaty network continues to meet the needs of the businesses and individuals receiving income from abroad. HMRC monitors the networks of other countries and invites representations from business, individuals, representative bodies, other Government departments and others with an interest in this area. The results, balanced with an estimate of the resources available, are then used to produce a schedule of work for the year ahead.

DTCs aim to eliminate the double taxation of income or gains arising in one State and paid to residents of another State. They do this by dividing the taxing rights that each treaty partner has under its domestic law over the same income and gains. They provide additional protection for taxpayers by specific measures combating discrimination in tax treatment. More generally, Conventions benefit the taxpayer by ensuring certainty of treatment and, as far as possible, by reducing compliance burdens. DTCs also serve an Exchequer protection role by including provisions to combat avoidance and evasion - not least by measures providing for the exchange of information between Revenue authorities.

In  its Programme for the year to 31 March 2008, the Government plans to complete work on new DTCs with the Faroes, Macedonia, Moldova, Slovenia and Thailand; and on Protocols with Australia, Mexico, New Zealand, South Africa and Switzerland. It also plans to complete work on new Tax Information Exchange Agreements (TIEAs) with Jersey, Guernsey, the Isle of Man, Anguilla, Bermuda and the British Virgin Islands.

Negotiations with Bahrain, the Cayman Islands, China, Croatia, Germany, Hungary, Luxembourg, Libya, Netherlands, Peru and Saudi Arabia should make progress during the year ahead.

Finally, there are plans to commence negotiations with the Turks & Caicos Islands, the Netherlands Antilles, Aruba, the Bahamas and Panama on TIEAs.

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HMRC: Double taxation conventions