HC Deb 01 December 1960 vol 631 cc681-2

8.15 p.m.

The Financial Secretary to the Treasury (Sir Edward Boyle)

I beg to move, That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Air Transport Profits) (Iran) Order, 1960, be made in the form of the draft laid before this House on 8th November. I now come to the double taxation Agreement with Iran. This is not a general Agreement such as the Agreement with Italy, or the replacement of the general Agreement with Sweden. This is a purely limited Agreement, which applies only to profits from air transport. So far, we have not been able to negotiate a double taxation Agreement with Iran covering a wider field than this. As I say, it is a limited Agreement applying to profits from air transport, and as such I commend it to the House.

8.16 p.m.

Sir Frank Soskice (Newport)

This seems to be a rather odd departure. I should be grateful if the Minister would tell me whether I am right in supposing that it enables air transport undertakings operating in the two countries to escape the possible incidence of double taxation. If that is the case, as I understand it is from the terms of the Order, and what the Minister has said, can he tell us whether we have precedents for this entirely piecemeal kind of double taxation provision?

If we are to start with air transport undertakings do we go on to other similar private undertakings operating in the two countries? If we do that I can foresee that we shall get into a considerable muddle and in countries like Iran we may have a whole plethora of separate double taxation Agreements which will induce a greater degree of confusion in what is already a confused area of our activities. I should be grateful if the right hon. Gentleman can tell us what the Government intend in this respect.

I do not say that it is unnecessary for the Government to make this Order. I am not opposing it, but asking where it is leading us. Are there precedents for this very piecemeal type of double taxation provision? Are similar agreements in force with other countries in the Middle East or elsewhere, and what are the intentions of the Government in regard to a proliferation of similar Orders with that country and others in the Middle East?

8.18 p.m.

Sir E. Boyle

I speak again by leave of the House. In answer to the right hon. and learned Member, his account of what the Order does is perfectly correct. This is not absolutely unique. In the past, we have negotiated limited Agreements with other countries on a number of occasions. For example, an Agreement was made in 1949 with Argentina which was limited to shipping and air transport profits, and there was a similar limited Agreement in 1951 with Greece which covered only air transport profits. The Agreement with Greece was superseded later by a more comprehensive Agreement.

We have never had, as it were, more than one double taxation Agreement with one country at one time, and as soon as we can widen the scope of this Agreement we shall do so. The work on these Agreements goes on unceasingly all the time. Quite obviously, that is necessary because of countries in Africa becoming independent, and a great deal of work needs to be done there. I think I am in order in saying that only very recently we managed to negotiate a new Agreement with Pakistan to replace the old Agreement which Pakistan terminated. I think that the answer to the right hon. and learned Member is that all the time we shall be searching for means of widening the scope of these Orders, but very often this is a case of "c'est le premier pas qui coûte". We want to start for a limited purpose and then to widen the scope if we can gain wider agreement in the years to come.

Question put and agreed to.

Resolved, That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Air Transport Profits) (Iran) Order, 1960, be made in the form of the draft laid before this House on 8th November.

To be presented by Privy Councillors or Members of Her Majesty's Household.