DOUBLE TAXATION RELIEF (Hansard, 1 November 1946)

§ Mr. Osbert Peake (Leeds North)
As I understand the position this agreement is very closely in line with that which the House has already approved in respect of double taxation on income between His Majesty's Government and the Government of the United States. We shall not, therefore, require from the Financial Secretary a detailed explanation of its provisions. We welcome it, as we did the agreement with the United States, on grounds of convenience and equity. This question of double taxation, which was only an irritant before the war, has become a very grievous one with the high rates of taxation now operative owing to war conditions, and it is quite wrong that persons should be obliged to pay taxes in two countries on the same sources of income at the prevailing high rates.
I would, however, ask the Financial Secretary one question on the agreement relating to relief from taxes on income which is the subject of the Motion now before the House. He will recall that when a similar agreement was made with the United States early in the year it had subsequently to be amended by protocol at the request of the United States authorities, and that the protocol deleted from the agreement what is contained in Article 9 of paragraph (3) of the present Agreement. That paragraph says that the provisions of Article 9 shall not apply to the profits or remuneration of public entertainers such as stage, motion picture, or radio artists, musicians, and athletes, and Article 9 is designed to give relief quickly from double taxation in cases where certain classes of persons are on short term visits from one country to another. This provision in paragraph (3) has been deleted at the request of the United States authorities from the agreement with the United States. I see, however, that it stands so far as the agreement with Canada is concerned. I imagine that this is probably the only particular in which this agreement will differ substantially from that made with the United States. I should like the 957 Financial Secretary first of all to tell us why this agreement is not similar in that respect to the one made with the United States, and secondly, whether this is, in fact, the only particular in which it differs from the other.

§ The Financial Secretary to the Treasury (Mr. Glenvil Hall)
It is quite true that a provision similar to paragraph (3) of Article 9 which appears in this draft Order also appeared in the original convention made with the United States but was afterwards deleted by protocol. The short answer is that what Hollywod forced or— perhaps I should not use that word—persuaded the American Government to look again at what the Canadians have accepted. This paragraph (3) is desired by the Canadian Government, and we have fallen in with it. The only other point on which this draft Order differs from the convention made earlier this year with the United States is that by agreement interest, patent royalties, and film rentals are treated differently. I can assure the House that the Articles in this Draft are what the Canadian Government desired, and that we were happy to fall in with their wishes. That being so, I hope the House will accept the draft Order as it stands.

§ Mr. Glenvil Hall
I beg to move, That an humble Address be presented to His Majesty, praying that the Double Taxation Relief (Taxes on Income) (Southern Rhodesia) Order, 1946, be made in the form of the draft laid before this House on 8th October.

§ Mr. Peake
As I have already said, I think we all welcome the extension of this double taxation agreement to our Dominions. So far as overseas countries are concerned, agreements have been made hitherto only with the United States and now with Canada, and this is the first of 958 the agreements with the other Dominions. Doubtless, further agreements with South Africa, Australia and New Zealand will follow in due due. I note that the right hon. Gentleman the Chancellor of the Exchequer is putting before the House today a Motion relating only to Income Tax so far as Southern Rhodesia is concerned. On both the former occasions, when the agreements were made with the United States and with Canada, we have had Motions relating not only to Income Tax but also to Estate Duty. Perhaps the hon. Gentleman the Financial Secretary could tell us whether there is to be an agreement with Southern Rhodesia on the question of Estate Duty also, or whether in the case of that country the relief is to be confined to taxes on income as defined in the agreement?

§ Mr. Glenvil Hall
As the right hon. Gentleman says, this draft Order covers Income Tax, but as he will find if he looks at the agreement that phrase includes in actual fact national defence contributions. Excess Profits Tax is not included because in Southern Rhodesia the Excess Profits Tax was repealed as from 31st March, 1945. So far as I know there is no Estate Duty payable in Southern Rhodesia, and that is why it has not been included.