The Double Taxation Relief (Taxes on Income) (Guyana) Order 1992

Made: 17th December 1992

At the Court at Buckingham Palace, the 17th day of December 1992 Present, The Queen’s Most Excellent Majesty in Council

Whereas a draft of this Order was laid before the House of Commons in accordance with the provisions of section 788(10) of the Income and Corporation Taxes Act 1988[^f00001], and an Address has been presented to Her Majesty by that House praying that an Order may be made in the terms of that draft:

Now, therefore, Her Majesty, in exercise of the powers conferred upon Her by section 788 of the said Act, and of all other powers enabling Her in that behalf, is pleased, by and with the advice of Her Privy Council, to order, and it is hereby ordered, as follows:—

1

This Order may be cited as the Double Taxation Relief (Taxes on Income) (Guyana) Order 1992.

2

It is hereby declared—

• (a) that the arrangements specified in the Convention set out in Part I of the Schedule to this Order and in the Exchange of Notes constituting an Agreement set out in Part II of that Schedule have been made with the Government of the Co-operative Republic of Guyana with a view to affording relief from double taxation in relation to income tax, corporation tax or capital gains tax and taxes of a similar character imposed by the laws of Guyana;

• (b) that those arrangements include provisions with respect to the exchange of information necessary for carrying out the domestic laws of the United Kingdom and the laws of Guyana concerning taxes covered by the arrangements including, in particular, provisions about the prevention of fiscal evasion with respect to those taxes; and

• (c) that it is expedient that those arrangements should have effect.

SCHEDULE

PART I — CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE GOVERNMENT OF THE CO-OPERATIVE REPUBLIC OF GUYANA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND CAPITAL GAINS

The Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Co-operative Republic of Guyana;

Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains and the encouragement of international trade and investment;

Have agreed as follows:

Article 1 — Personal scope

This Convention shall apply to persons who are residents of one or both of the Contracting States.

Article 2 — Taxes covered

Article 3 — General definitions

Article 4 — Resident

Article 5 — Permanent establishment

Article 6 — Limitation of relief

Where under any provision of this Convention any income or capital gain is relieved from tax in a Contracting State and, under the law in force in the other Contracting State a person, in respect of that income or capital gain, is subject to tax by reference to the amount thereof which is remitted to or received in that other State and not by reference to the full amount thereof, then the relief to be allowed under this Convention in the first-mentioned State shall apply only to so much of the income or capital gain as is remitted to or received in the other State.

Article 7 — Income from immovable property

Article 8 — Business profits

Article 9 — Shipping and air transport

Article 10 — Associated enterprises

Article 11 — Dividends

Article 12 — Interest

Article 13 — Royalties

Article 14 — Technical fees

Article 15 — Capital Gains

Article 16 — Independent personal services

Article 17 — Dependent personal services

Article 18 — Directors' fees

Directors' fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State.

Article 19 — Artistes and athletes

Article 20 — Pensions

Article 21 — Government service

Article 22 — Students and trainees

Payments which a student, apprentice or business trainee who is, or was immediately before visiting a Contracting State, a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State.

Article 23 — Other income

Items of income beneficially owned by a resident of a Contracting State, wherever arising, other than income paid out of trusts or the estates of deceased persons in the course of administration, not dealt with in the foregoing Articles of this Convention shall be taxable only in that State.

Article 24 — Elimination of double taxation

Article 25 — Non-discrimination

Article 26 — Mutual agreement procedure

Article 27 — Exchange of information

Article 28 — Members of diplomatic or permanent missions and consular posts

Article 29 — Entry into force

Each of the Contracting States shall notify to the other, through diplomatic channels, the completion of the procedures required by its laws for the bringing into force of this Convention. This Convention shall enter into force on the date of the later of these notifications and shall thereupon have effect:

• (a) in the United Kingdom:

• (i) in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6th April in the calendar year next following that in which the later of these notifications is given;

• (ii) in respect of corporation tax, for any financial year beginning on or after 1st April in the calendar year next following that in which the later of these notifications is given;

• (b) in Guyana:

• (i) with respect to tax withheld at the source on amounts paid, credited or remitted to non-residents on or after the first day of January in the calendar year in which the later of these notifications is given; and

• (ii) with respect to other Guyana tax for the year of income commencing 1st January in the calendar year in which the later of these notifications is given.

Article 30 — Termination

This Convention shall remain in force until terminated by one of the Contracting States. Either Contracting State may terminate this Convention by giving notice of termination, through diplomatic channels, at least six months before the end of any calendar year after the expiration of five years from the date of entry into force of the Convention. In such event, this Convention shall cease to have effect:

• (a) in the United Kingdom:

• (i) in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6th April in the calendar year next following that in which the notice is given;

• (ii) in respect of corporation tax, for any financial year beginning on or after 1st April in the calendar year next following that in which the notice is given;

• (b) in Guyana:

• (i) with respect to tax withheld at the source on amounts paid, credited or remitted to non-residents on or after January 1st in the calendar year next following that in which such notice is given;

• (ii) with respect to other Guyana tax for the year of income commencing January 1st, in the calendar year next following that in which such notice is given.

In witness whereof the undersigned, duly authorised thereto by their respective Governments, have signed this Convention.

Done in duplicate at Georgetown this 31st day of August 1992.

PART II — EXCHANGE OF NOTES

Georgetown

31st August 1992

Excellency

I have the honour to refer to the Convention between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Co-operative Republic of Guyana for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital Gains which has been signed today and to propose on behalf of the Government of the United Kingdom that, in applying paragraph (4) of Article 25 (non-discrimination) of that Convention, the expression “other similar enterprises of the first-mentioned State” should be interpreted as referring to enterprises of the United Kingdom or Guyana as the case may be the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more persons who are not residents of the United Kingdom or Guyana.

If the foregoing proposal is acceptable to the Government of the Co-operative Republic of Guyana I have the honour to suggest that the present Note and Your Excellency’s reply to that effect should be regarded as constituting an agreement between the two Governments in this matter.

I avail myself of this opportunity to extend to Your Excellency the assurance of my highest consideration.

Robert D. Gordon

His Excellency the High

Commissioner of the

United Kingdom of

Great Britain and

Northern Ireland

Georgetown

31st August 1992

Excellency

I am in receipt of your Note dated August 31st, 1992 which states as follows:

I have the honour to refer to the Convention between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Co-operative Republic of Guyana for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital Gains which has been signed today and to propose on behalf of the Government of the United Kingdom that, in applying paragraph (4) of Article 25 (Non-Discrimination) of that Convention, the expression “Other similar enterprises of the first-mentioned State” should be interpreted as referring to enterprises of the United Kingdom or Guyana as the case may be the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more persons who are not residents of the United Kingdom or Guyana.

The foregoing proposal being acceptable to the Government of Guyana, I have the honour to confirm that Your Excellency’s Note and this Reply should be regarded as constituting an agreement between the two Governments in this matter.

I take this opportunity to renew to Your Excellency the assurances of my highest consideration.

Winston Murray

His Excellency the Deputy

Prime Minister, Trade, Tourism

and Industry performing the

duties of the Minister of Finance

of the Co-operative Republic

of Guyana

Signed

N. H. Nicholls — Clerk of the Privy Council

Explanatory note

(This note is not part of the Order)

The Convention with Guyana is set out in the Schedule to this Order. The Convention provides for business profits not arising through a permanent establishment to be taxed only in the country of the taxpayer’s residence. Profits attributable to a permanent establishment may be taxed in the country in which the permanent establishment is situated (Articles 5 and 8).

Income from immovable property may be taxed in the country in which the property is situated (Article 7).

Shipping and air transport profits are generally to be taxed only in the residence state of the operator (Article 9).

The Convention includes rules for determining taxable profits when a company in one country is related to a company in the other (Article 10).

The rate of tax imposed in the country of source on dividends derived by a resident of the other is not to exceed 10 per cent of the gross amount of the dividends when the beneficial owner is a company controlling at least 10 per cent of the voting power in the company paying the dividends, and 15 per cent in all other cases (Article 11).

The rate of tax imposed in the country of source on interest derived by a resident of the other country is not to exceed 15 per cent of the gross amount flowing to the other country. Certain categories of interest (e.g. interest paid to the Government of the other country) will be exempt from tax in the source state (Article 12).

The rate of tax imposed in the source country on royalties is limited to 10 per cent where the beneficial owner is a resident of the other country (Article 13).

The rate of tax on technical fees arising in one country and paid to a resident of the other country is in general not to exceed 10 per cent of the gross amount although in the case of fees arising in Guyana falling within the scope of section 39(10) of the Guyana Income Tax Act, Chapter 81:01, the rate of tax shall not exceed such smaller percentage of the gross amount as may be agreed by the recipient and the Government of Guyana (Article 14).

Each country may tax capital gains in accordance with its domestic law although gains from the alienation of ships or aircraft operated in international traffic shall be taxable only in the country of residence of the operator (Article 15).

The earnings of temporary business visitors and some other individuals are, subject to certain conditions, to be taxed only in the country of the taxpayer’s residence (Articles 16 and 17). Fees received by a resident of one country in his capacity as a director of a company resident in the other country may be taxed in the latter country (Article 18). Income derived from the activities of artistes and athletes may be taxed in the country in which those activities are performed (Article 19). Occupational pensions (other than those paid in respect of government service) and annuities are to be taxed only in the recipient’s country of residence (Article 20) while government service remuneration and pensions are normally to be taxed only by the paying Government (Article 21). Payments made to visiting students, apprentices and business trainees are generally exempt from tax in the country visited (Article 22). Other income (with the exception of income from trusts and estates of deceased persons under administration) not specified in the Convention remains taxable only in the recipient’s country of residence (Article 23).

Where income continues to be taxable in both countries credit will be given in the taxpayer’s country of residence for tax imposed by the other country. The credit to be given in the United Kingdom for tax imposed in Guyana includes credit for tax spared under certain provisions of Guyana law. In the case of dividends, the United Kingdom will give credit for the underlying tax paid in Guyana where the shareholder is a United Kingdom company which controls at least 10 per cent of the voting power in the company paying the dividends (Article 24).

There are provisions safeguarding nationals and enterprises of one country against discriminatory taxation in the other country (Article 25), and for consultation (Article 26) and exchanges of information (Article 27) between the taxation authorities of the two countries.

The Convention will enter into force on the date of the later of the notifications by each country of the completion of its legislative procedures. The Convention is to take effect in the United Kingdom on or after 1st April in respect of corporation tax and on or after 6th April for income tax and capital gains tax in the calendar year next following that in which it enters into force. The date of entry into force will in due course be published in the London, Edinburgh and Belfast Gazettes.

Footnotes

[^f00001]: 1988 c. 1; section 788 is extended by section 277 of the Taxation of Chargeable Gains Act 1992(c. 12).