Diverted profits tax ― overview

Produced by Tolley in association with

Corporation Tax

Guidance

Background

The diverted profits tax (DPT) was introduced by Finance Act 2015, ss 77–116 and Sch 16. The aim of the DPT is to deter multinational groups of companies from implementing aggressive tax planning techniques which divert profits away from the UK in an attempt to minimise the group’s overall corporation tax bill. The DPT legislation applies to accounting periods beginning on or after 1 April 2015. There are apportionment rules for accounting periods that straddled that date.

HMRC guidance on the DPT can be found at INTM489500 onwards.

This guidance note helps readers to understand the basic principles of the DPT regime to enable them to ascertain whether a particular scenario is likely to attract a charge to DPT, with links to additional sources of information as appropriate. These include articles from Taxation and Tax Journal relating to DPT. For additional expert commentary on DPT, see also ‘Introduction to Diverted Profits Tax ― update’, by Paul Bowes, Tolley’s Tax Digest, May 2019 ― TTD, Issue 199[1.1]

The Government ran a consultation

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Paul Bowes

International Tax Consultant at Paul R Bowes

Paul Bowes is an independent tax consultant who principally advises on corporate structuring and the taxation of foreign profits, having previously worked in practice with leading accounting firms and within the banking sector. He has actively participated in the various consultations relating to the reform of company taxation that have taken place in the UK in the last decade or so, including the reform of the controlled foreign companies' rules.

Popular Articles

Corporation Tax

Carried-forward losses restriction

Carried-forward losses restrictionOverview of the carried-forward loss restrictionAn important restriction in the use of losses carried forward was introduced by Finance (No 2) Act 2017. Subject to a de minimis of £5m (known as the deductions allowance), most carried-forward losses are restricted to

14 Jul 2020 11:09 | Produced by Tolley Read more

Corporation Tax

Temporary differences

Temporary differencesCalculation of temporary differencesThe temporary difference arising in respect of an asset or liability is calculated by comparing the carrying value of that asset or liability with its tax base.IAS 12 uses the concept of taxable or deductible temporary differences. Whether a

14 Jul 2020 13:49 | Produced by Tolley in association with Malcolm Greenbaum Read more

Employment Tax

Non-business expenses

Non-business expensesIntroductionIn order for an expense to be tax deductible it must be incurred because of an employee’s employment. Any non-business related expense is, therefore, not relievable except in some very particular circumstances.This guidance note deals with three separate issues. The

14 Jul 2020 12:16 | Produced by Tolley Read more

UU��ֱ��