Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, if he will undertake an assessment of the potential merits of impact assessments of the effect on the (a) economy, (b) human rights and (c) environment of bilateral tax treaties between the UK and a low-income countries.

In a Written Ministerial Statement on 15 March 2011, after impact assessments were introduced, the then Exchequer Secretary to the Treasury gave details of exceptions from the requirement to publish an impact assessment; secondary legislation enacting double taxation treaties was listed among them.

The reason we have not produced an impact assessment is that tax treaties impose no obligations on taxpayers; rather they give UK residents relief from foreign tax in prescribed circumstances. They also provide relief from UK tax for non-residents in a comparable situation.

Furthermore, as the benefits of tax treaties depend on dynamic changes of behaviour by taxpayers, it is incredibly difficult to analyse the impact of tax treaties. But by governing the taxation of cross-border income flows in a predictable manner and eliminating double taxation and excessive taxation, tax treaties promote international trade and investment, leading to sustainable tax revenues which are vital in financing for development.