Contracting in EU - am I now stuffed ?? Help Please !

[BlasterBates]

Under many double taxation agreements you may be able to claim exemption from UK tax on ....

This refers to annuities pensions and divîdends and other special types of income that you earn in the UK while working in a DT country, and are normally taxed in the UK.

This does not mean your income that has already been taxed. The whole point of a double taxation agreement is that you are only taxed once, either in the UK or the other country.

In the questioner's case he would not pay tax on his Slovakian income.

[Euro-commuter]

This refers to annuities pensions and divîdends and other special types of income that you earn in the UK while working in a DT country, and are normally taxed in the UK.

This does not mean your income that has already been taxed. The whole point of a double taxation agreement is that you are only taxed once, either in the UK or the other country.

In the questioner's case he would not pay tax on his Slovakian income.

He would not pay UK tax on income earned in Slovakia, if he spent enough time in Slovakia. Otherwise he would pay UK tax on it, but with a credit against UK tax due, of the amount of tax paid to Slovakia.

[BlasterBates]

In a double taxation agreement there is no credit.

Tax credit only apply if there is no double taxation agreement.

Double taxation agreement means you only pay tax in one country on a source of income.

[ASB]

Double taxation agreement means you only pay tax in one country on a source of income.

I think that where to confusion comes in. A double taxation agreement does NOT mean that. It means whatever is in the agreement (which is often, but not always as you say).

HMRC say:-

Non-residents, and residents of more than one country

9.2 If you are a resident of a country with which the UK has a double taxation agreement, you may be able to claim exemption or partial relief from UK tax on certain types of income from UK sources. You may also be able to claim exemption from capital gains tax on the disposal of assets. The precise conditions of exemption or relief can be found in the relevant agreement. It is not possible to give full details here as they vary from agreement to agreement. If you are resident both in the UK and a country with which the UK has a double taxation agreement, there may be special provisions in the agreement for treating you as a resident of only one of the countries for the purposes of the agreement.

[BlasterBates]

...well that is true, but I think you'll find no double taxation treaty with an EU country where any form of income is taxed twice, with some form of tax credits. Where they differ is in which country the taxation is paid. This is particularly the case with investments, sometimes they are taxed in the country where they are paid, sometimes you can claim exemption but generally beacause the you are liable for tax in the other country.