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A new double taxation convention (DTC) between the UK and Saudi Arabia has been signed.

During the State Visit to the United Kingdom of His Majesty King Abdullah of Saudi Arabia, a first-time comprehensive DTC between the United Kingdom and the Kingdom of Saudi Arabia was signed in London on 31 October 2007 by the Rt Hon Alistair Darling MP, Chancellor of the Exchequer, and H.E. Dr. Ibrahim A. Al-Assaf, Minister of Finance of Saudi Arabia.

Welcoming the Convention, the Chancellor commented that: "This treaty is a welcome addition to the UK's tax treaty network; it will strengthen economic ties between our two countries and will be good for British companies doing business in Saudi Arabia".

The treaty generally follows the OECD Model Double Taxation Convention. Important features include the complete elimination of source-country withholding taxes on all interest payments. Dividends may generally be taxed at source up to a maximum rate of 5% and royalties to a maximum of 8%.

The Convention will be presented to Parliament early next year for approval, when it will be published by the Stationery Office. The Convention will enter into force once both countries have completed their legislative procedures. In the United Kingdom the provisions of the Convention will take effect from 1 April (for corporation tax purposes), and from 6 April (for income tax and capital gains tax purposes) in the calendar year following the date of entry into force. In Saudi Arabia, the provisions will take effect from 1 January in the calendar year following the date of entry into force.

Link

Uk/Saudi Arabia DTC