FA 2019: diverted profits tax

Ross Robertson

FA 2019 makes several changes and additions to the diverted profits tax (DPT) legislation within FA 2015 Part 3.

The DPT impacts multinational businesses where transactions between the UK and foreign companies are perceived to lack economic substance or arrangements are viewed by HMRC as artificial.

The changes and additions have the following effects:

They make clear that diverted profits will be taxed under either DPT or corporation tax provisions but not both.
They stop a planning opportunity from amendments being made to a company’s corporation tax return after the review period has ended and the DPT time limit has expired.
They extend the ‘review period’ the period during which HMRC and the taxpayer work together to determine the extent of diverted profits from 12 months to 15 months.
They extend a company’s right to amend its corporation tax return to include diverted profits to the first 12 months of the review period.
They...

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