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HMRC internal manual

International Manual

DT applications and claims: Overview of DT Agreements

How double taxation arises

The taxation laws of most countries have the same basic common features that

  • all income arising in a country is taxed in that country regardless of where the beneficial owner lives
  • a resident of a country is taxed on all income he receives regardless of where it arises

For example: An individual living in Spain receives a pension from the UK. There is UK tax deducted from it because it has arisen in the UK and the individual pays tax on it in Spain because he or she lives there.