International briefing for January 2015

Chris Morgan

Since my last article in November we have seen an Autumn Statement and draft clauses for Finance Bill 2015 published in the UK. By far the most significant announcement in the international tax area was the new 25% diverted profits tax. This has two broadly defined aims:

to prevent an overseas entity with substantial UK activities from deliberately avoiding the establishment of a UK taxable presence; and
to prevent UK companies or permanent establishments from reducing their corporation tax by making payments to related parties with an effective lower tax rate.

However a major and a contentious effect of the law is to create a presumption against the taxpayer in transfer pricing cases where one of the parties is considered to fail the economic substance...

If you or your firm subscribes to Taxjournal.com, please click the login box below:

If you do not subscribe but are a registered user, please enter your details in the following boxes:

Subscribe Now...

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this article in full.

to prevent an overseas entity with substantial UK activities from deliberately avoiding the establishment of a UK taxable presence; and
to prevent UK companies or permanent establishments from reducing their corporation tax by making payments to related parties with an effective lower tax rate.

However a major and a contentious effect of the law is to create a presumption against the taxpayer in transfer pricing cases where one of the parties is considered to fail the economic substance...

If you or your firm subscribes to Taxjournal.com, please click the login box below:

If you do not subscribe but are a registered user, please enter your details in the following boxes: