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Dollar Incomes (Double Taxation)

Volume 393: debated on Tuesday 9 November 1943

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asked the Chancellor of the Exchequer whether he is aware that residents in the British Isles in receipt of an earned dollar income from the United States of America pay the United States Government a tax of 30 per cent. on such income, making their total Income Tax 13s. in the £; and what is the corresponding position of a United States resident in receipt of an income in pounds sterling earned in this country?

With regard to the first part of my hon. Friend's Question, the United Kingdom Income Tax is payable on the net amount after deduction of the United States withholding tax, and earned income relief is given on that amount. As regards the second part of the Question, I understand that the United States Income Tax law grants certain relief in respect of income from foreign sources which has been taxed in the country of origin; the total rate of taxation in the circumstances stated would depend on the total income of the taxpayer.

Is it not possible for the British Government and the United State; Government to come to some arrangement whereby this crushing double taxation on their respective nationals could be obviated?

All I can say is that it has not been possible to arrive at any arrangement with foreign countries comparable with the Dominions Income Tax relief arrangement.