Notices of Amendments: 31 August 2016                  

15

Finance Bill, continued

Mr Chancellor of the Exchequer

87

Schedule  10,  page  439,  line  10,  leave out “fully”

Mr Chancellor of the Exchequer

88

Schedule  10,  page  439,  line  12,  leave out “section 259JB” and insert “section

259JBA”

Mr Chancellor of the Exchequer

89

Schedule  10,  page  440,  leave out lines 10 to 15 and insert—

“(6)    

The following provisions provide for the counteraction of the dual territory

double deduction amount—

(a)    

section 259JB (cases where a company is dual resident),

(b)    

section 259JBA (cases where a company is a relevant multinational and

the United Kingdom is the parent jurisdiction), and

(c)    

section 259JC (cases where a company is a relevant multinational, the

United Kingdom is the PE jurisdiction and the amount is not counteracted

in the parent jurisdiction).”

Mr Chancellor of the Exchequer

90

Schedule  10,  page  440,  line  18,  leave out “or the UK is the parent jurisdiction”

Mr Chancellor of the Exchequer

91

Schedule  10,  page  440,  line  20,  leave out “as a result” and insert “by reason”

Mr Chancellor of the Exchequer

92

Schedule  10,  page  440,  line  21,  leave out from second “company” to end of line 24

Mr Chancellor of the Exchequer

93

Schedule  10,  page  440,  line  39,  leave out “or relevant multinational company”

Mr Chancellor of the Exchequer

94

Schedule  10,  page  440,  line  45,  leave out “or relevant multinational company”

Mr Chancellor of the Exchequer

95

Schedule  10,  page  441,  line  2,  leave out “or relevant multinational company”

Mr Chancellor of the Exchequer

96

Schedule  10,  page  441,  line  8,  after “is” insert “(in substance)”

Mr Chancellor of the Exchequer

97

Schedule  10,  page  441,  line  11,  after “company” insert “for an accounting period”

Notices of Amendments: 31 August 2016                  

16

Finance Bill, continued

Mr Chancellor of the Exchequer

98

Schedule  10,  page  441,  line  19,  after “income”” insert “of the company for an

accounting period”

Mr Chancellor of the Exchequer

99

Schedule  10,  page  441,  line  21,  after “company” insert “for that period”

Mr Chancellor of the Exchequer

100

Schedule  10,  page  441,  line  23,  after “company” insert “for a permitted taxable

period”

Mr Chancellor of the Exchequer

101

Schedule  10,  page  441,  line  25,  at end insert—

“( )    

A taxable period of the company is “permitted” for the purposes of paragraph (b)

of subsection (8) if—

(a)    

the period begins before the end of 12 months after the end of the

accounting period mentioned in paragraph (a) of that subsection, or

(b)    

where the period begins after that—

(i)    

a claim has been made for the period to be a permitted period in

relation to the amount of ordinary income, and

(ii)    

it is just and reasonable for the amount of ordinary income to

arise for that taxable period rather than an earlier period.”

Mr Chancellor of the Exchequer

102

Schedule  10,  page  441,  line  25,  at end insert—

“259JBA 

Counteraction where mismatch arises because of a relevant multinational

and the UK is the parent jurisdiction

(1)    

This section applies where—

(a)    

the dual territory double deduction amount arises by reason of the

company being a relevant multinational company, and

(b)    

the United Kingdom is the parent jurisdiction.

(2)    

If some or all of the dual territory double deduction amount is (in substance)

deducted (“the impermissible overseas deduction”), for the purposes of a tax

under the law of a territory outside the United Kingdom, from the income of any

person, for any taxable period, that is not dual inclusion income of the company—

(a)    

the dual territory double deduction amount that may be deducted, for

corporation tax purposes, from the company’s income for the deduction

period is reduced by the amount of the impermissible overseas deduction,

and

(b)    

such just and reasonable adjustments (if any) as are required to give

effect to that reduction, for corporation tax purposes, are to be made.

(3)    

Any adjustment required to be made under subsection (2) may be made (whether

or not by an officer of Revenue and Customs)—

(a)    

by way of an assessment, the modification of an assessment, amendment

or disallowance of a claim, or otherwise, and

(b)    

despite any time limit imposed by or under any enactment.

Notices of Amendments: 31 August 2016                  

17

Finance Bill, continued

(4)    

In this section “dual inclusion income” of the company means an amount that is

both—

(a)    

ordinary income of the company for an accounting period for corporation

tax purposes, and

(b)    

ordinary income of the company for a permitted taxable period for the

purposes of a tax charged under the law of a territory outside the United

Kingdom.

(5)    

A taxable period is “permitted” for the purposes of paragraph (b) of subsection

(4) if—

(a)    

the period begins before the end of 12 months after the end of the

accounting period of the company mentioned in paragraph (a) of that

subsection, or

(b)    

where the period begins after that—

(i)    

a claim has been made for the period to be a permitted period in

relation to the amount of ordinary income, and

(ii)    

it is just and reasonable for the amount of ordinary income to

arise for that taxable period rather than an earlier period.”

Mr Chancellor of the Exchequer

103

Schedule  10,  page  441,  line  26,  leave out from “of” to end of line 27 and insert “a

relevant multinational and is not counteracted in the parent jurisdiction”

Mr Chancellor of the Exchequer

104

Schedule  10,  page  441,  leave out lines 32 to 48 and insert—

“(c)    

it is reasonable to suppose that no provision of the law of the parent

jurisdiction that is equivalent to section 259JBA applies.”

Mr Chancellor of the Exchequer

105

Schedule  10,  page  442,  line  1,  leave out “restricted deduction” and insert “dual

territory double deduction amount”

Mr Chancellor of the Exchequer

106

Schedule  10,  page  442,  line  5,  leave out “restricted deduction” and insert “dual

territory double deduction amount”

Mr Chancellor of the Exchequer

107

Schedule  10,  page  442,  line  15,  leave out “restricted deduction” and insert “dual

territory double deduction amount”

Mr Chancellor of the Exchequer

108

Schedule  10,  page  442,  line  31,  after “is” insert “(in substance)”

Mr Chancellor of the Exchequer

109

Schedule  10,  page  442,  line  34,  at end insert “of the company for an accounting

period”

Notices of Amendments: 31 August 2016                  

18

Finance Bill, continued

Mr Chancellor of the Exchequer

110

Schedule  10,  page  442,  line  42,  after “income”” insert “of the company for an

accounting period”

Mr Chancellor of the Exchequer

111

Schedule  10,  page  442,  line  44,  after “company” insert “for that period”

Mr Chancellor of the Exchequer

112

Schedule  10,  page  442,  line  46,  after “company” insert “for a permitted taxable

period”

Mr Chancellor of the Exchequer

113

Schedule  10,  page  442,  line  48,  at end insert—

“( )    

A taxable period of the company is “permitted” for the purposes of paragraph (b)

of subsection (9) if—

(a)    

the period begins before the end of 12 months after the end of the

accounting period mentioned in paragraph (a) of that subsection, or

(b)    

where the period begins after that—

(i)    

a claim has been made for the period to be a permitted period in

relation to the amount of ordinary income, and

(ii)    

it is just and reasonable for the amount of ordinary income to

arise for that taxable period rather than an earlier period.”

Mr Chancellor of the Exchequer

157

Schedule  10,  page  443,  line  11,  at end insert—

“( )    

Section 259KAA defines “dual territory double deduction”, “excessive PE

deduction” and “PE jurisdiction”.”

Mr Chancellor of the Exchequer

115

Schedule  10,  page  444,  line  7,  leave out “subsection (7)” and insert “section

259KAA”

Mr Chancellor of the Exchequer

116

Schedule  10,  page  444,  line  11,  leave out “section 259FA(8)” and insert “section

259KAA”

Mr Chancellor of the Exchequer

117

Schedule  10,  page  444,  leave out lines 14 to 19

Notices of Amendments: 31 August 2016                  

19

Finance Bill, continued

Mr Chancellor of the Exchequer

158

Schedule  10,  page  444,  leave out lines 20 to 42 and insert—

“(8)    

Condition E is that it is reasonable to suppose—

(a)    

where subsection (6)(a) applies, that no provision of any of Chapters 3 to

5 or 7 to 10 nor any equivalent provision under the law of a territory

outside the United Kingdom applies, or will apply, in relation to the tax

treatment of any person in respect of the mismatch payment, or

(b)    

where subsection (6)(b) applies, that no provision of Chapter 6 nor any

equivalent provision under the law of a territory outside the United

Kingdom applies, or will apply, in relation to the tax treatment of the

company in relation to which the excessive PE deduction arises.

(9)    

Condition F is that—

(a)    

subsection (6)(a) applies and it is reasonable to suppose that a provision

of any of Chapters 3 to 5 or 7 to 10, or an equivalent provision under the

law of a territory outside the United Kingdom, would apply in relation to

the tax treatment of P if—

(i)    

P were the payer in relation to the mismatch payment,

(ii)    

P were a payee in relation to the mismatch payment, or

(iii)    

where the relevant mismatch is a hybrid payee deduction/non-

inclusion mismatch or a hybrid entity double deduction amount,

P were an investor in the hybrid entity concerned, or

(b)    

the relevant mismatch is an excessive PE deduction.”

Mr Chancellor of the Exchequer

159

Schedule  10,  page  445,  line  20,  at end insert—

“259KAA 

  Meaning of “dual territory double deduction”, “excessive PE

deduction” and “PE jurisdiction”

(1)    

This section has effect for the purposes of this Chapter.

(2)    

A “dual territory double deduction” means an amount that can be deducted by a

company both—

(a)    

from income for the purposes of a tax charged under the law of one

territory, and

(b)    

from income for the purposes of a tax charged under the law of another

territory.

(3)    

A “PE deduction” is an amount that—

(a)    

may (in substance) be deducted from a company’s income for the

purposes of calculating the company’s taxable profits, for a taxable

period, for the purposes of a tax that is charged on the company, under

the law of a territory (“the PE jurisdiction”), by virtue of the company

having a permanent establishment in that territory, and

(b)    

is in respect of a transfer of money or money’s worth, from the company

in the PE jurisdiction to the company in another territory (“the parent

jurisdiction”) in which it is resident for the purposes of a tax, that—

(i)    

is actually made, or

(ii)    

is (in substance) treated as being made for tax purposes.

(4)    

A PE deduction is “excessive” so far as it exceeds the sum of—

(a)    

any increases, resulting from the circumstances giving rise to the PE

deduction, in the taxable profits of the company, for a permitted taxable

Notices of Amendments: 31 August 2016                  

20

Finance Bill, continued

period, for the purposes of a tax charged under the law of the parent

jurisdiction, and

(b)    

any amounts by which a loss made by the company, for a permitted

taxable period, for the purposes of a tax charged under the law of the

parent jurisdiction, is reduced as a result of the circumstances giving rise

to the PE deduction.

(5)    

A taxable period of the company is “permitted” for the purposes of subsection (4)

if—

(a)    

the period begins before the end of 12 months after the end of the taxable

period mentioned in subsection (3)(a), or

(b)    

where the period begins after that—

(i)    

a claim has been made for the period to be a permitted period for

the purposes of subsection (4), and

(ii)    

it is just and reasonable for the circumstances giving rise to the

PE deduction to affect the profits or loss made for that period

rather than an earlier period.”

Mr Chancellor of the Exchequer

119

Schedule  10,  page  445,  line  45,  leave out “section 259FA(4)(b)” and insert

“section 259KAA(3)(b)”

Mr Chancellor of the Exchequer

120

Schedule  10,  page  446,  line  4,  leave out “section 259FA(4)(b)” and insert “section

259KAA(3)(b)”

Mr Chancellor of the Exchequer

121

Schedule  10,  page  446,  line  28,  leave out “section 259FA(4)(b)” and insert

“section 259KAA(3)(b)”

Mr Chancellor of the Exchequer

122

Schedule  10,  page  446,  line  32,  leave out “section 259FA(4)(b)” and insert

“section 259KAA(3)(b)”

Mr Chancellor of the Exchequer

123

Schedule  10,  page  450,  line  19,  at end insert—

“Relevant investment funds

259NZA 

Meaning of “relevant investment fund”

(1)    

“Relevant investment fund” means—

(a)    

an open-ended investment company within the meaning of section 613 of

CTA 2010,

(b)    

an authorised unit trust within the meaning of section 616 of that Act, or

(c)    

an offshore fund within the meaning of section 354 of this Act (see

section 355),

which meets the genuine diversity of ownership condition (whether or not a

clearance has been given to that effect).

Notices of Amendments: 31 August 2016                  

21

Finance Bill, continued

(2)    

“The genuine diversity of ownership condition” means—

(a)    

in the case of an offshore fund, the genuine diversity of ownership

condition in regulation 75 of the Offshore Funds (Tax) Regulations 2009

(S.I. 2009/3001), and

(b)    

in the case of an open-ended investment company or an authorised unit

trust, the genuine diversity of ownership condition in regulation 9A of the

Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964).”

Mr Chancellor of the Exchequer

124

Schedule  10,  page  452,  leave out lines 19 to 22 and insert—

“(b)    

for the purposes of influencing the conduct of U’s affairs—

(i)    

P is able to secure that T acts in accordance with P’s wishes,

(ii)    

T can reasonably be expected to act, or typically acts, in

accordance with P’s wishes,

(iii)    

T is able to secure that P acts in accordance with T’s wishes, or

(iv)    

P can reasonably be expected to act, or typically acts, in

accordance with T’s wishes,”

Mr Chancellor of the Exchequer

125

Schedule  10,  page  454,  line  16,  at end insert—

““relevant investment fund” has the meaning given by section 259NZA;”

Mr Chancellor of the Exchequer

126

Schedule  10,  page  456,  line  14,  at end insert—

Mr Chancellor of the Exchequer

127

Schedule  10,  page  456,  line  16,  at end insert—

Mr Chancellor of the Exchequer

128

Schedule  10,  page  458,  leave out lines 3 and 4