Double taxation agreements guide 2025

Read our double taxation agreement guide for expats. Discover how double taxation treaties help you manage your taxes efficiently across countries

If you live in more than one country, you need to understand some details about international tax law, particularly double taxation relief. Double taxation relief may be available through the UK’s double taxation agreements with other countries.

A double taxation agreement is an agreement between two countries that prevents individuals from paying tax twice on the same income in different countries. Double tax treaties can exist between any two countries, but not all countries in the world have them.

In this article, we explore the double taxation agreements the UK has with other countries around the world. For the purpose of this blog, we will be covering someone who is resident in the UK and another country.

What is a double taxation agreement?

Double tax agreements (sometimes referred to as double tax treaties) are agreements between two countries. They lay out the tax rules regarding the taxation of income or gains earned in either country (sometimes referred to as a jurisdiction).

Double tax agreements can vary, but many follow very similar rules, but may have subtle differences. It is worth seeking expert advice from a specialist in international taxation to understand the rules fully.

Who benefits from double taxation agreements?

Double taxation relief can benefit people working abroad, high-net-worth individuals and pensioners claiming pensions.

A double tax agreement may be applicable if you are:

1. Resident in one of the two countries covered by the agreement and have income in the other country.

or

2. Resident in both countries and claiming that you are a treaty non-resident in one of them.

Residency

You need to understand which country you are a resident of. To find out if you’re a resident in the UK or not, go to the guidance note for Statutory Residence Test (RDR3).

Which countries have a double tax agreement with the UK

The UK Government website has an up-to-date list of the countries that have a double tax agreement with the UK. Check if your country has a UK double tax treaty here.

Types of relief available

Full relief: You may be able to claim full relief to recover all the UK tax paid on your UK income. However, you may be required to pay tax on the income to the country you live in, depending on its double taxation agreement with the UK.

Partial relief: You may be eligible for partial relief to recover some of the UK tax paid on your UK income. For example, if the UK’s basic rate of tax is 20% and your country’s double taxation agreement with the UK is 15%, you can claim 5% relief.

Credit relief: Credit relief can be claimed if your income is taxable in the UK and the country where you live. Your country of residence will give you credit for the tax you’ve paid on your UK income, against its own tax. A claim for credit relief needs to be made from the country you live in.

Other types of relief: Some countries’ double taxation agreements with the UK may have other conditions that you need to meet to claim UK tax relief.

Checklist

Before you claim relief from UK tax, you should check the following:

• The full terms of the double taxation agreement that affect you.
• Collate evidence to show that you meet its conditions.
• Keep the evidence to support your claim now and in the future.

Double tax agreements and treaty residence

For individuals who are tax residents in both the UK and another jurisdiction (a dual resident), and where the latter country has a tax agreement with the UK, the agreement defines the tax rights over the income and gains between the two countries.

When interpreting a double tax treaty, you need to work out in which country you are resident for the purposes of the treaty.

Where you are a treaty resident is determined by a series of ’tie breaker’ tests as outlined in the agreement in place with the UK.

Generally, you will be a treaty resident in the country in which you have your permanent home. However, if you have a home in both countries, you will need to determine which country would be considered to be your ‘centre of vital interests’. For example, which country do you have stronger family, social and economic ties with? If it is hard to determine which country you have stronger ties with, then further tests will be applied.

How to claim treaty residence under double tax agreements

In a more global world, many people now have to apply double tax treaties to their tax affairs. However, claiming double tax relief can still be very complex. So, our advice is to seek professional help from international tax experts, such as dns accountants.

An individual who may be tax resident in two jurisdictions, including the UK, must claim treaty residence via a self-assessment tax return or through a specific tax agreement relief claim.

People can do this themselves, but there are many complex rules and tests to undertake to ensure that the proper rules are applied to ensure that the correct tax residence statuses are used.

Certificate of overseas residence

You will need a certificate of overseas residence if you want to claim relief from UK tax on your UK income, and the country you reside in has a double taxation agreement with the UK. To obtain a certificate of overseas residence, you’ll need to contact your country’s tax authority.

The certificate of overseas residence should show:

• That you pay taxes on all or part of the income you’re claiming relief for in the country you live in.
• The amount of income you’ve paid tax on in that country

You should attach the certificate to your claim form and send it in with your tax return.

Contact us to request your free introduction to a tax specialist and once your details are received, we will evaluate your situation and hand-pick the best partner from our network to contact you directly.

Contact dns today on 0333 060 3321 or email us at [email protected].

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About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.