PAYE81015 - PAYE operation: double taxation claims submitted by non resident individuals: certification by an overseas tax authority

One condition for relief from UK income tax usually included in a Double Taxation Agreement (DTA) is that the beneficial owner of the income must be resident in the country as defined in the DTA. Some DTA’s also require that the income on which relief from UK tax is claimed must be subject to tax in the other country. See INTM332200 for more about subjection to tax.

All DT forms need to be certified by the tax authorities of the individual’s country of residence. The wording of the certification required will depend on the terms of the relevant DTA. The certification provides evidence that the individual is regarded by the overseas tax authority as being resident there for purposes of that country’s tax.

Most overseas countries will fill in the certification box on the front of our DT individual claim forms, using the official tax authority stamp.

However, there are other examples of acceptable certification and some certification issues requiring special attention. These include

Bahrain
British Virgin Islands
Cayman Islands (wef 06/04/2011)
Cyprus
Greece
Hong Kong
Israel
Italy
Kuwait
Malta
Portugal
Qatar
Saudi Arabia
Spain
Taiwan
United Arab Emirates (UAE)
USA
Alternative evidence
Claim through an SA return

Bahrain

Use the space in Part B.2 of the form to answer the following question:

• explain why you consider that you’re resident in Bahrain, particularly in relation to your permanent home, and your personal and economic relations
• enclose a copy of your Bahrain certificate of residence

Read Article 4(1) of the UK/Bahrain Double Taxation Convention – Statutory Instrument 2012 Number 3075.

British Virgin Islands

Unlike in most countries, a resident of the British Virgin Islands may be unable to obtain certification of residence by the BVI Authorities for the purpose of the DT claim form. In these circumstances the individual is required to provide a statement regarding their residence status with their completed DT claim form in Part B.2 - Additional Information.

Cayman Islands (wef 06/04/2011)

All claims should include confirmation of the number of years, before the commencement of their UK source pension(s), they were continuously a resident of the Cayman Islands? This should be provided in Part B.2 - Additional Information.

Unlike in most countries, a resident of the Cayman Islands may be unable to obtain certification of residence by the Cayman Islands Authorities for the purpose of the DT claim form.

If the form is not certified, the individual is required to provide a statement, in Part B.2 - Additional Information, regarding their residence status. This statement must confirm how the law of the Cayman Islands recognises them as being a resident of the Cayman Islands.

Cyprus

No DT relief is available for residents of Cyprus whose claims lack the certification of the internationally recognised Republic of Cyprus; in particular we should not accept a claim purporting to be certified by the non-internationally recognised Turkish Republic of North Cyprus (otherwise known as Mersin 10). The UK / Turkey DTA does not apply to residents of Cyprus. 

Greece

The Greek Tax Authority has notified HMRC of changes to the way in which they will process Double Taxation forms. They are no longer certifying the DT Individual form but providing an electronic Certificate of Residence which has a QR code at the bottom for verifying the document. At present we do not have any information on the process for scanning the QR code to verify the document but until we are advised otherwise, we should be accepting Certificates that look like the attached document as alternative evidence of residence when processing these claims.

Hong Kong

Use the space in Part B.2 of the form to answer the following question:

• explain why you consider that you’re resident in Hong Kong, particularly in relation to your ordinarily resident status, and your days of presence over 1 or 2 years, as appropriate
• enclose a copy of your Hong Kong certificate of residence

Read Article 4(1) of the UK/Hong Kong Double Taxation Convention – Statutory Instrument 2010 Number 2974.

Israel

Refer to guidance at PAYE81060.

Italy

The Italian tax authority may provide a Certificate of Tax Residence for Individuals (Attestato Di Residenza Fiscale Perone Fisiche) to confirm that the taxpayer is a fiscal resident of Italy rather than certifying the DT Individual form.

Do not accept the Fiscal Residence certificate. Explain to the customer that we still require a fully completed and certified DT Individual Form.

Kuwait

Use the space in Part B.2 of the form to answer the following question:

• explain why you consider that you're resident in Kuwait, particularly in relation to your Nationality status and your total days of presence in Kuwait in the yar concerned
• enclose a copy of your Kuwait certificate of residence

Read Article 4(1) of the UK/Kuwait Double Taxation Convention - Statutory Instrument 1999 Number 2036.

Malta

The Maltese tax authorities emboss the claim. These can sometimes be difficult to identify and so need particular attention.

Portugal

Please note that the Portuguese Tax Authority have confirmed to HMRC that they will not certify our DT-Individual forms.

Instead and in all cases, the taxpayer must provide a Portuguese Certificate of Residence (CoR) with their DT-Individual form. These CoR's can be validated online using the steps shown below.

Please note that some forms may appear to have been certified, however, the Portuguese Authorities have confirmed this is not a valid authorisation and may only be a post reference number (similar to a DMS EVNA reference numbers). Therefore, in all cases, taxpayers must provide CoR's with their DT-Individual form.

You can verify Portuguese Certificate of Residence through the Portuguese Tax Authorities website using the following steps:

1. Open Google Apps - HMRC (in My Services) and insert: https://www.portaldasfinancas.gov.pt/pt/validacaoCertidaoForm.action

2. To translate the website into English, click 'Translate' in the Pop Up box which appears at the top right corner.

3. This page asks you to enter two references: 'TIN' and 'Validation Code' - These are shown at the bottom left of the Portuguese Certificate of Residence. If you are unable to get the page translated to English, the two references show as 'No Contribuinte' (TIN) and 'Code Vaidacao' (Validation Code).

4. You are then presented with a new 'Pop Up Box' which shows a copy of the electronic version of the 'Certificate of Residence' - If this matches the copy provided by the taxpayer then it can be accepted.

5. Please note: You may have to unblock 'Pop Ups' (option should appear at the top right) to view the electronic version of the Certificate of Residence.

Qatar

Qatar Unlike in most countries, a resident of Qatar may be unable to obtain certification of residence by the Qatari Authorities for the purpose of the DT claim form. As such, an individual is required to provide a statement regarding their residence status with their completed DT claim form and enclose a copy of their Qatari residence permit. This statement must include an explanation as to why they consider themselves to be resident in Qatar, particularly in relation to their permanent home, their personal and economic relations in Part B.2 – Additional Information.

Saudi Arabia

Unlike in most countries, a resident of Saudi Arabia may be unable to obtain certification of residence by the Saudi Authorities for the purpose of the DT claim form. As such, an individual is required to provide a statement regarding their residence status with their completed DT claim form and enclose a copy of their Saudi residence permit (also known as an iqama).

Spain

For residents of Spain, the Spanish tax authorities are no longer verifying Part A of the form Double Taxation: UK-Spain (Form Spain-Individual) (HMRC Website). Spanish residents are now supplied with a certificate from the Spanish tax authorities.

There are two types of certificate:

• Residencia Fiscal en España - which is issued to establish, in general, residence on Spanish territory
• Residencia Fiscal en España Conveñio - which is issued to establish resident status in Spain for the purposes of the provisions of an agreement to avoid double taxation signed by Spain.

Action to take

Spanish residents making a claim to relief from UK tax under the UK / Spain DTA should still complete the form ‘Spain Individual’ but should now submit their original Residencia Fiscal en España Conveñio with their claim form. You can accept this certificate as evidence of their Spanish residence for dealing with claims to relief under the UK / Spain DTA. (Do not accept the Residencia Fiscal en España for claims made under the DTA).

Taiwan

Care needs to be taken to ensure certification has been provided by the Taiwanese and not the mainland Republic of China tax authorities, confirming that any pensions are subject to tax. Taiwanese certification often includes a separate certificate from their office in Taipei. Any cases of difficulty should be referred to your local band O / HO support.

United Arab Emirates (UAE)

Unlike in most countries, a resident of the UAE may be unable to get their DT-Indiviual form fully certified by the UAE tax authority, to confirm they are a resident of the UAE. As such, UAE resident individuals must provide a fully completed DT-Individual form and attach a Tax Residency Certificate from the UAE Federal Tax Authority (FTA), to confirm they are a UAE resident for the purpose of the UK/UAE Double Taxation Agreement.

USA

All claims received from individual's resident in the USA, should include an attached separate ‘Form 6166’ confirming that the claimant is a resident for US tax purposes.

Alternative evidence

When alternative evidence has been supplied and the country is not listed above, the individual needs to send the letter explaining the reason for refusing to stamp and sign the form from the overseas tax authority.

If the letter of refusal is included with the claim, escalate these cases to TSI.

Claim through an SA return

On an SA return individuals will claim DT relief using an HS304 (PDF 121KB) (HMRC website) (external users can find the guidance at http://www.hmrc.gov.uk/helpsheets/hs304.pdf). This can be accepted although relief is only applied for the year of the SA return.

The list above provides the main common examples but is not exhaustive.