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HMRC internal manual

Double Taxation Relief Manual

USA: double taxation agreement, Article 3: General definitions

Replaced by new DTA, which applies in UK from 1st April 2003 for CT, 6th April 2003 for IT and 1st January 2004 for PRT. For US withholding taxes it applies from 1st May 2003 and for other US taxes from 1st January 2004. See DT19932.

(1) In this Convention, unless the context otherwise requires:

(a) the term `corporation` means a United States corporation, a United Kingdom corporation, or any body corporate or other entity of a third State which is treated as a body corporate for tax purposes by both Contracting States;


(i) the term `United States corporation` means a corporation (or any unincorporated entity treated as a corporation for United States tax purposes) which is created or organised under the laws of the United States or any State thereof or the District of Columbia; and

(ii) the term `United Kingdom corporation` means any body corporate or unincorporated association created or organised under the laws of the United Kingdom, but does not include a partnership, a local authority, or a local authority association;

(c) the term `person` includes an individual, a corporation, a partnership, an estate, a trust and any other body of persons;

(d) the term `enterprise of a Contracting State` means an industrial or commercial undertaking carried on by a resident of a Contracting State;

(e) the term `international traffic` means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;

(f) the term `competent authority` means:

(i) in the case of the United States, the Secretary of the Treasury or his delegate, and

(ii) in the case of the United Kingdom, the Commissioners of Inland Revenue or their authorised representative;


(i) the term `United States’ means the United States of America; and

(ii) when used in a geographical sense, the States thereof and the District of Columbia.

Such term also includes:

(aa) the territorial sea thereof, and

(bb) the seabed and subsoil of the submarine areas adjacent to the coast thereof, but beyond the territorial sea, over which the United States exercises sovereign rights, in accordance with international law, for the purpose of exploration for and exploitation of the natural resources of such areas, but only to the extent that the person, property, or activity to which the Convention is being applied is connected with such exploration or exploitation;


(i) the term `United Kingdom’ means Great Britain and Northern Ireland, including any area outside the territorial sea of the United Kingdom which in accordance with international law has been or may hereafter be designated, under the laws of the United Kingdom concerning the Continental Shelf, as an area within which the rights of the United Kingdom with respect to the seabed and subsoil and their natural resources may be exercised;

(i) `the term `Contracting State` means the United States or the United Kingdom, as the context requires;

(j) `the term `third State` means any State or territory other than the United States or the United Kingdom and the term `enterprise of a third State` shall be construed accordingly;

(k) `the term `nationals` means:

(i) in relation to the United Kingdom, all citizens of the United Kingdom and Colonies, British subjects under sections 2, 13(1) or 16 of the British Nationality Act 1948, and British subjects by virtue of section 1 of the British Nationality Act 1965, provided they are patrial within the meaning of the Immigration Act 1971, so far as these provisions are in force on the date of entry into force of this Convention or have been modified only in minor respects so as not to affect their general character;

(ii) in relation to the United States, United States citizens.

(2) As regards the application of this Convention by a Contracting State any term not otherwise defined shall, unless the context otherwise requires and subject to the provisions of Article 25 (Mutual agreement procedure), have the meaning which it has under the laws of that Contracting State relating to the taxes which are the subject of this Convention.