Us-Uk Competent Authority Agreement

The US-UK Competent Authority Agreement – What You Need to Know

The US-UK Competent Authority Agreement (CAA) is a bilateral agreement between the United States and the United Kingdom regarding the exchange of information related to taxation. The agreement was signed in 2019 and has been in force since July 2020.

The purpose of the CAA is to improve tax compliance and to prevent tax evasion by allowing the tax authorities of the US and the UK to exchange information related to taxes. The agreement covers all types of taxes, including income tax, corporate tax, and value-added tax (VAT).

Under the CAA, the US and the UK tax authorities can exchange information on taxpayers who have a presence in both countries. This includes information on income and assets, as well as information on tax returns, audits, and investigations.

The exchange of information is subject to strict safeguards and confidentiality provisions to ensure that the information is used only for tax purposes and is not disclosed to any unauthorized parties.

The CAA is part of a broader effort by the US and the UK to combat tax evasion and promote tax transparency. Both countries are members of the OECD`s Base Erosion and Profit Shifting (BEPS) project, which aims to prevent companies from artificially shifting profits to low-tax jurisdictions.

The CAA is also in line with the global trend towards greater tax transparency and information exchange. The Automatic Exchange of Information (AEOI) initiative, which was launched by the OECD in 2014, requires countries to exchange information on financial accounts held by non-residents.

Overall, the US-UK Competent Authority Agreement is a positive step towards improving tax compliance and reducing tax evasion. It provides a framework for the two countries to exchange information on taxpayers who have a presence in both countries, and helps to promote tax transparency on a global scale.

As a taxpayer with interests in both the US and the UK, it is important to be aware of the CAA and its implications. If you have any questions or concerns about how the agreement may affect you, it is recommended that you consult with a tax professional who is knowledgeable about the US and UK tax systems.