Finance Bill (HC Bill 49)

2 After section 5D insert—

“5E Double taxation relief

(1) This section applies if a person (“P”) is liable to pay a qualifying
foreign tax in respect of bets in respect of which P is also liable to pay
5general betting duty under a provision of sections 2 to 4 or section
5AB (“the relevant provision”).

(2) Bets in respect of which P is liable to pay both general betting duty
under the relevant provision and the qualifying foreign tax are
referred to as “eligible bets”.

(3) 10Credit may be allowed for all or part of the qualifying foreign tax
paid by P.

(4) Whether any credit is allowed is determined in accordance with
Schedule A1.

(5) If credit is allowed for an accounting period, P is entitled to claim a
15repayment of so much of the duty actually paid as is equal to the
amount of credit allowed.

(6) Total repayments to P for that accounting period in respect of bets of
the applicable class (taking into account all qualifying foreign taxes)
must not, in aggregate, exceed the duty actually paid.

(7) 20“The applicable class” means the class of bets to which the relevant
provision applies.

(8) “The duty actually paid” means the general betting duty paid by P
for that accounting period in respect of bets of the applicable class.

(9) A bet does not count as an “eligible bet” if it was made by or on behalf
25of P.”

3 After section 8 insert—

“8ZA Double taxation relief

(1) This section applies if a person (“P”) is liable to pay a qualifying
foreign tax in respect of bets in respect of which P is also liable to pay
30pool betting duty.

(2) Bets in respect of which P is liable to pay both pool betting duty and
the qualifying foreign tax are referred to as “eligible bets”.

(3) Credit may be allowed for all or part of the qualifying foreign tax
paid by P.

(4) 35Whether any credit is allowed is determined in accordance with
Schedule A1.

(5) If credit is allowed for an accounting period, P is entitled to claim a
repayment of so much of the duty actually paid as is equal to the
amount of credit allowed.

(6) 40Total repayments to P for that accounting period (taking into account
all qualifying foreign taxes) must not, in aggregate, exceed the duty
actually paid.

(7) “The duty actually paid” means the pool betting duty paid by P for
that accounting period.

(8) A bet does not count as an “eligible bet” if it was made by or on behalf
of P.”

4 5After section 10 insert—

“10A Definition of qualifying foreign tax

(1) For the purposes of general betting duty or pool betting duty, a
“qualifying foreign tax” is a foreign tax specified by the
Commissioners in relation to that duty (“the relevant duty”).

(2) 10“Specified” means specified in a notice published by the
Commissioners, as revised or replaced from time to time.

(3) The Commissioners must specify a foreign tax under this section if
they are satisfied that—

(a) it is a gambling tax,

(b) 15the activities on which it is charged include betting,

(c) the bets in respect of which it is charged include bets in
respect of which the relevant duty is also charged, and

(d) the charge in respect of such bets is based on betting by
persons in or deemed to be in the country or territory where
20the tax is imposed.

(4) The following factors indicate that a tax is a gambling tax—

(a) that it is charged on activities involving betting or gaming
(rather than activities generally), and

(b) that it goes towards meeting general public expenditure
25(rather than being ring-fenced for a particular purpose).

(5) A notice specifying a foreign tax may provide that the tax is to be
treated as having been specified with effect from a date that is earlier
than the date of the notice.”

5 After section 26I insert—

“26IA 30Double taxation relief

(1) This section applies if—

(a) P is liable to pay remote gaming duty on the provision of
facilities for remote gaming, and

(b) P is also liable to pay a qualifying foreign tax in respect of
35remote gaming using those facilities.

(2) The remote gaming using those facilities in respect of which the
qualifying foreign tax is charged is referred to as “eligible gaming”.

(3) Credit may be allowed for all or part of the qualifying foreign tax
paid by P.

(4) 40Whether any credit is allowed is determined in accordance with
Schedule 4B.

(5) If credit is allowed for an accounting period, P is entitled to claim a
repayment of so much of the duty actually paid as is equal to the
amount of credit allowed.

(6) Total repayments to P for that period (taking into account all
qualifying foreign taxes) must not, in aggregate, exceed the duty
actually paid.

(7) “The duty actually paid” means the remote gaming duty paid by P
5for that accounting period.

(8) Remote gaming does not count as “eligible gaming” if one of the
participants in the game in question is P or someone acting on P’s
behalf.

26IB Definition of qualifying foreign tax

(1) 10For the purposes of remote gaming duty, a “qualifying foreign tax”
is a foreign tax specified by the Commissioners in relation to remote
gaming duty.

(2) “Specified” means specified in a notice published by the
Commissioners, as revised or replaced from time to time.

(3) 15The Commissioners must specify a foreign tax under this section if
they are satisfied that—

(a) it is a gambling tax,

(b) the activities on which it is charged include remote gaming,

(c) the remote gaming on which it is charged includes remote
20gaming using facilities in respect of which remote gaming
duty is also charged, and

(d) the charge is based on remote gaming by persons in or
deemed to be in the country or territory where the tax is
imposed.

(4) 25The following factors indicate that a tax is a gambling tax—

(a) that it is charged on activities involving betting or gaming
(rather than activities generally), and

(b) that it goes towards meeting general public expenditure
(rather than being ring-fenced for a particular purpose).

(5) 30A notice specifying a foreign tax may provide that the tax is to be
treated as having been specified with effect from a date that is earlier
than the date of the notice.

26IC Regulations about claims for double taxation relief

(1) The Commissioners may make regulations about—

(a) 35claims for repayment under section 26IA, and

(b) the making of repayments under that section.

(2) Regulations under this section may in particular include provision
about—

(a) the time within which claims may be made,

(b) 40the form, content and delivery of claims,

(c) the evidence required to satisfy the Commissioners of the
validity of claims, and

(d) the investigation and processing of claims.”

6 In section 33 (interpretation)—

(a) in subsection (1), after the definition of “the Commissioners” insert—

• ““foreign tax” means a tax, including any sort of duty or
  levy, imposed in a country or territory outside the
  United Kingdom (see also subsection (1B));”, and

(b) 5after subsection (1A) insert—

“(1B) A reference in this Act to a foreign tax does not include any
penalty, interest, surcharge or other such cost arising in
connection with the tax (whether or not recoverable as if it
were that tax).”

7 10Before Schedule 1 insert—

“ Schedule A1 Betting duties: double taxation relief

Introduction

1 This Schedule sets out the rules for determining whether credit is
allowed under section 5E or 8ZA for qualifying foreign tax paid by
15P.

Definitions

2 (1) This Schedule is to be read as follows.

(2) “The applicable class”—

(a) in the case of section 5E, has the meaning given in that
20section, and

(b) in the case of section 8ZA, means dutiable pool bets.

(3) A “reconciliation period” is—

(a) if P has monthly accounting periods, a period consisting of
12 consecutive accounting periods,

(b) 25if P has quarterly accounting periods, a period consisting
of 4 consecutive accounting periods, and

(c) if P has any other length of accounting period, a period
consisting of such number of consecutive accounting
periods as would produce a period as near as possible to
30365 days.

(4) In relation to an accounting period, a reference to “the
reconciliation period” is to the reconciliation period in which that
accounting period falls.

Credit allowed

3 (1) 35To determine whether credit is allowed for an accounting
period—

(a) calculate the notional UK liability and the notional foreign
liability for the accounting period, and

(b) compare the two figures.

(2) 40No credit is allowed if either figure is nil or both figures are nil.

(3) Subject to that, credit is allowed of an amount equal to the smaller
of the two figures (or, if they are the same, of an amount equal to
that figure).

Notional UK liability

4 5The notional UK liability for an accounting period is calculated as
follows—

Step 1

If the applicable class is a class to which a provision of sections 2
to 4 applies, calculate P’s net stake receipts for the period in
10accordance with section 5 but by reference to eligible bets (rather
than bets of the applicable class).

If the applicable class is the class to which section 5AB applies,
calculate the commission charges in accordance with that section
relating to eligible bets determined in the period (rather than bets
15to which that section applies).

If the applicable class is dutiable pool bets, calculate P’s net pool
betting receipts for the period in accordance with section 7A but
by reference to eligible bets (rather than dutiable pool bets).

In calculating P’s net stake receipts or net pool betting receipts for
20the purposes of this Step, do not carry forward to the period any
losses in respect of eligible bets that arose in an accounting period
before the start of the reconciliation period.

Step 2

If the amount calculated under Step 1 is nil or a negative amount,
25the notional UK liability for the period is nil.

Otherwise, apply the appropriate rate to the amount calculated
under Step 1. The result is the notional UK liability for the period.

“The appropriate rate” is the percentage specified in whichever of
section 2(3), 3(3)(a), 3(3)(b), 4(3), 5AB(4) or 7(2) applies to the
30applicable class, as in force for the accounting period in question.

Notional foreign liability

5 The notional foreign liability for an accounting period is
calculated as follows—

Step 1

35Calculate the amount of qualifying foreign tax that would be
payable by P for the accounting period if the tax were charged
solely in respect of eligible bets and accounted for by reference to
periods corresponding to P’s accounting periods.

Any apportionment needed for this calculation is to be done on a
just and reasonable basis.

If the law under which the qualifying foreign tax is imposed
provides for losses to be carried forward, do not carry forward to
5the period any losses (in respect of eligible bets) that arose before
the start of the reconciliation period.

Step 2

If the amount calculated under Step 1 is nil, the notional foreign
liability for the period is nil.

10Otherwise, calculate the sterling equivalent of the amount
calculated under Step 1. The result is the notional foreign liability
for the period.

The sterling equivalent is to be calculated using the London
closing exchange rate for the last day of the accounting period.

15Clawback

6 (1) This paragraph applies if in respect of the applicable class of
bets—

(a) P receives a repayment under section 5E or 8ZA for one or
more accounting periods in a reconciliation period, and

(b) 20the amount calculated under Step 1 in paragraph 4 for the
final accounting period in that reconciliation period is a
negative amount.

(2) P is liable to repay all or part of the repayment or repayments
received.

(3) 25The amount that P is liable to repay is the smallest of—

(a) the loss multiplied by the rate at which the qualifying
foreign tax is charged in respect of eligible bets,

(b) the loss multiplied by the appropriate rate (as defined in
paragraph 4) for the applicable class of bets, and

(c) 30the repayment (or the sum of the repayments) made to P
for the reconciliation period.

(4) “The loss” means the negative amount mentioned in sub-
paragraph (1)(b) but expressed as a positive number.

(5) If there is more than one rate at which the qualifying foreign tax is
35charged in respect of eligible bets, each rate is to be applied to an
appropriate portion of the loss in order to arrive at the amount
under sub-paragraph (3)(a).

(6) If all or part of the qualifying foreign tax is calculated other than
on a net receipts basis, sub-paragraph (3) has effect as if paragraph
40(a) were omitted.

(7) Any amount due from P under this paragraph is to be treated as if
it were an amount of unpaid general betting duty or, as the case
may be, pool betting duty.

Breach of return obligations

7 5The Commissioners are not required to make a repayment under
section 5E or 8ZA if P is in breach of any obligation to deliver a
return with respect to—

(a) general betting duty,

(b) pool betting duty,

(c) 10bingo duty,

(d) remote gaming duty,

(e) gaming duty, or

(f) lottery duty.

Reduction etc in foreign tax paid

8 (1) 15Sub-paragraphs (2) to (4) apply if any of the following events take
place—

(a) the way in which a qualifying foreign tax is charged or
calculated is changed retrospectively,

(b) a tax authority waives or refunds all or part of an amount
20of qualifying foreign tax due from P, or

(c) as a result of being liable to pay an amount of qualifying
foreign tax, P or a connected person is entitled to any kind
of tax deduction or relief calculated by reference to the
amount of qualifying foreign tax.

(2) 25P must notify the Commissioners of the event on becoming aware
of it.

(3) If the event is a retrospective change in the way in which the
qualifying foreign tax is charged or calculated, the amount for
which credit is allowed under section 5E or 8ZA is to be
30recalculated in accordance with this Schedule.

(4) In any other case, the amount for which credit is allowed under
section 5E or 8ZA is to be reduced by a just and reasonable sum to
reflect the amount of tax waived or refunded or the deduction or
relief given.

(5) 35If it transpires (on account of this paragraph or otherwise) that a
repayment or part of a repayment under section 5E or 8ZA should
not have been made, P is liable for the amount that should not
have been repaid, as if it were unpaid general betting duty or, as
the case may be, pool betting duty.

(6) 40Section 1122 of the Corporation Tax Act 2010 (connected persons)
applies for the purposes of sub-paragraph (1)(c).”

8 (1) Schedule 1 (betting duties) is amended as follows.

(2) In paragraph 2, after sub-paragraph (4) insert—

“(5) Regulations under this paragraph may also in particular include
provision about claims for repayment under section 5E and about
the making of any such repayment, including provision about—

(a) 5the time within which claims may be made,

(b) the form, content and delivery of claims,

(c) the evidence required to satisfy the Commissioners of the
validity of claims, and

(d) the investigation and processing of claims.”

(3) 10In paragraph 2A, after sub-paragraph (3) insert—

“(4) Regulations under sub-paragraph (2) may also include provision
about claims for repayment under section 8ZA and about the
making of any such repayment, including provision about
anything mentioned in paragraph 2(5)(a) to (d).”

9 15After Schedule 4A insert—

“ Schedule 4B Remote gaming duty: double taxation relief

Introduction

1 This Schedule sets out the rules for determining whether credit is
allowed under section 26IA for qualifying foreign tax paid by P.

20Reconciliation periods

2 (1) For the purposes of this Schedule, a “reconciliation period” is—

(a) if P has quarterly accounting periods, a period consisting
of 4 consecutive accounting periods, and

(b) if P has any other length of accounting period, a period
25consisting of such number of consecutive accounting
periods as would produce a period as near as possible to
365 days.

(2) In relation to an accounting period, a reference to “the
reconciliation period” is to the reconciliation period in which that
30accounting period falls.

Credit allowed

3 (1) To determine whether credit is allowed for an accounting
period—

(a) calculate the notional UK liability and the notional foreign
35liability for the accounting period, and

(b) compare the two figures.

(2) No credit is allowed if either figure is nil or both figures are nil.

(3) Subject to that, credit is allowed of an amount equal to the smaller
of the two figures (or, if they are the same, of an amount equal to
40that figure).

Notional UK liability

4 The notional UK liability for an accounting period is calculated as
follows—

Step 1

5Calculate P’s remote gaming profits for the period in accordance
with section 26C(2) but by reference to the use of the facilities
provided by P for eligible gaming (rather than remote gaming
generally).

In calculating P’s remote gaming profits for the purposes of this
10Step, do not carry forward to the period any losses (in respect of
the use of the facilities for eligible gaming) that arose in an
accounting period before the start of the reconciliation period.

Step 2

If the amount calculated under Step 1 is nil or a negative amount,
15the notional UK liability for the period is nil.

Otherwise, apply the appropriate rate to the amount calculated
under Step 1. The result is the notional UK liability for the period.

“The appropriate rate” is the percentage specified in section 26C(1)
as in force for the accounting period in question.

20Notional foreign liability

5 The notional foreign liability for an accounting period is
calculated as follows—

Step 1

Calculate the amount of qualifying foreign tax that would be
25payable by P for the accounting period if the tax were charged in
respect of eligible gaming and were accounted for by reference to
periods corresponding to P’s accounting periods.

Any apportionment needed for this calculation is to be done on a
just and reasonable basis.

30If the law under which the qualifying foreign tax is imposed
provides for losses to be carried forward, do not carry forward to
the period any losses (in respect of eligible gaming) that arose
before the start of the reconciliation period.

Step 2

35If the amount calculated under Step 1 is nil, the notional foreign
liability for the period is nil.

Otherwise, calculate the sterling equivalent of the amount
calculated under Step 1. The result is the notional foreign liability
for the period.

The sterling equivalent is to be calculated using the London
5closing exchange rate for the last day of the accounting period.

Clawback

6 (1) This paragraph applies if in respect of eligible gaming—

(a) P receives a repayment under section 26IA for one or more
accounting periods in a reconciliation period, and

(b) 10the amount calculated under Step 1 in paragraph 4 for the
final accounting period in that reconciliation period is a
negative amount.

(2) P is liable to repay all or part of the repayment or repayments
received.

(3) 15The amount that P is liable to repay is the smallest of—

(a) the loss multiplied by the rate at which the qualifying
foreign tax is charged in respect of eligible gaming,

(b) the loss multiplied by the appropriate rate (as defined in
paragraph 4), and

(c) 20the repayment (or the sum of the repayments) made to P
for the reconciliation period.

(4) “The loss” means the negative amount mentioned in sub-
paragraph (1)(b) but expressed as a positive number.

(5) If there is more than one rate at which the qualifying foreign tax is
25charged in respect of eligible gaming, each rate is to be applied to
an appropriate portion of the loss in order to arrive at the amount
under sub-paragraph (3)(a).

(6) If all or part of the qualifying foreign tax is calculated other than
on a net receipts basis, sub-paragraph (3) has effect as if paragraph
30(a) were omitted.

(7) Any amount due from P under this paragraph is to be treated as if
it were an amount of unpaid remote gaming duty.

Breach of return obligations

7 The Commissioners are not required to make a repayment under
35section 26IA if P is in breach of any obligation to deliver a return
with respect to—

(a) general betting duty,

(b) pool betting duty,

(c) bingo duty,

(d) 40remote gaming duty,

(e) gaming duty, or

(f) lottery duty.