Other news in brief

A new UK-Luxembourg Double Tax Treaty (DTT) was signed on 7 June 2022. The new DTT has not yet entered into force, but assuming the UK and Luxembourg complete the necessary procedures during 2022, it is expected that it will have effect from 1 April 2023 for corporation tax and 1 January 2023 for withholding tax. One significant change to the DTT is the addition of a land-rich company clause to the capital gains article. This new clause will see Luxembourg tax-resident investors who sell shares (or comparable interests) that derive more than 50 percent of their value directly or indirectly from UK land, potentially subject to UK non-resident capital gains tax (although under UK domestic law non-resident capital gains tax will only apply in this context where more than 75 percent of the value is derived from UK land). Changes have also been made to the royalties article, such that royalties will only be subject to tax in the State where the recipient is resident. This change will be welcome following the repeal of the UK provisions which enacted the EU Interest and Royalties Directive post-Brexit.

On 27 May 2022, the OECD published a short consultation on the tax certainty aspects of Amount A under Pillar One. In the accompanying press release, the OECD explains that a central element of Amount A is an innovative Tax Certainty Framework covering all aspects of the new rules, including the elimination of double taxation. The intention is to avoid uncoordinated compliance activity and potentially time-consuming processes to relieve double taxation. The consultation closed on 10 June 2022 and comments were submitted by KPMG International.

On 20 May 2022, the Government released a short consultation on the format of the transitional arrangements for the 2023 revaluation of properties for business rates in England. It does not extend to the level of transitional relief and the rateable value thresholds for the different levels of relief which will be decided in the autumn once the outcomes of the revaluation are known. Other relief schemes, such as the Supporting Small Business relief, are also outside of the scope of the consultation. The consultation will close on 25 July 2022.