Taxation (International and Other Provisions) Bill

House of Commons

Session 2009 - 10
Internet Publications
Other Bills before Parliament

Taxation (International and Other Provisions) Bill

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 2 — Transfer pricing and advance pricing agreements
357

99
In section 931H(5) for “Part 18 of ICTA” substitute “Part 2 of TIOPA 2010”.
100
In section 931J(7) for “Part 18 of ICTA” substitute “Part 2 of TIOPA 2010”.
101
In section 1266(1)(b) (resident partners and double taxation agreements) for
“section 788 of ICTA” substitute “section 2(1) of TIOPA 2010”.
Finance Act 2009 (c. 10)
5
102
FA 2009 is amended as follows.
103
In section 56(1) (tax in respect of MEPs’ pay) for “Part 18 of ICTA (double
tax” substitute “Part 2 of TIOPA 2010 (double taxation”.
104
In Schedule 16 in paragraph 7(2)(a) (purposes for which straddling
accounting periods are split) after “Chapter 4 of Part 17, and Part 18, of
10
ICTA” insert “and Part 2 of TIOPA 2010”.
105
In Schedule 35 in paragraph 2(4)(b) for “section 788 of ICTA” substitute
“sections 2 and 6 of TIOPA 2010”.
Part 2
Transfer pricing and advance pricing agreements
15
Taxes Management Act 1970 (c. 9)
106
TMA 1970 is amended as follows.
107
In section 9A(4)(b) (scope of enquiries) for “paragraph 5C of Schedule 28AA
to the principal Act” substitute “section 168(1) of TIOPA 2010”.
108   (1)
Amend the second column of the Table in section 98 (special returns etc) as
20
follows.
      (2)
Omit the entry for section 86(4) of FA 1999.
      (3)
At the appropriate place insert—
“Section 228 of TIOPA 2010.”
Income and Corporation Taxes Act 1988 (c. 1)
25
109
ICTA is amended as follows.
110
Omit section 770A (which introduces Schedule 28AA).
111
Omit Schedule 28AA (transfer pricing).
Finance Act 1998 (c. 36)
112
FA 1998 is amended as follows.
30
113
Omit section 110 (determinations requiring the sanction of the
Commissioners for Her Majesty’s Revenue and Customs).
114
Omit section 111 (duty to give notice to persons who may be able to make or
amend a claim under paragraph 6 of Schedule 28AA or who may have rights
to be heard in appeals under that Schedule).
35

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 2 — Transfer pricing and advance pricing agreements
358

Finance Act 1999 (c. 16)
115
FA 1999 is amended as follows.
116
Omit section 85 (advance pricing agreements).
117
Omit section 86(1) to (8) and (10) (provisions supplementary to section 85).
118
Omit section 87 (effect of advance pricing agreements on non-parties).
5
Finance Act 2000 (c. 17)
119   (1)
Schedule 22 to FA 2000 (tonnage tax) is amended as follows.
      (2)
In paragraph 58(1) for the words after paragraph (b) substitute—

“Part 4 of the Taxation (International and Other Provisions) Act 2010
(transactions not at arm’s length) has effect with the omission of
10
sections 174 to 184, 187 to 189 and 191 to 196 (elimination of double
counting etc).”
      (3)
In paragraph 58(2) for “Schedule 28AA” substitute “Part 4 of the Taxation
(International and Other Provisions) Act 2010”.
      (4)
In paragraph 59(1) for “Schedule 28AA to the Taxes Act 1988” substitute
15
“Part 4 of the Taxation (International and Other Provisions) Act 2010”.
      (5)
For paragraph 59(2) substitute—
    “(2)
As applied by sub-paragraph (1), Part 4 of the Taxation
(International and Other Provisions) Act 2010 has effect with the
omission of sections 174 to 184 , 187 to 189 and 191 to 196
20
(elimination of double counting etc).”
      (6)
In paragraph 59(3) for “Schedule 28AA” substitute “Part 4 of the Taxation
(International and Other Provisions) Act 2010”.
      (7)
In paragraph 60(2) for “Schedule 28AA” substitute “Part 4 of the Taxation
(International and Other Provisions) Act 2010”.
25
Income Tax (Trading and Other Income) Act 2005 (c. 5)
120
ITTOIA 2005 is amended as follows.
121   (1)
Amend section 172F (transfer pricing rules to take precedence over sections
172D and 172E) as follows.
      (2)
In subsection (1)(a) for “Schedule 28AA to ICTA” substitute “Part 4 of
30
TIOPA 2010”.
      (3)
In subsection (1)(b) for “that Schedule” substitute “that Part”.
      (4)
In subsection (2) for “Schedule 28AA to ICTA without falling to be adjusted
under that Schedule” substitute “Part 4 of TIOPA 2010 without falling to be
adjusted under that Part”.
35
      (5)
For subsection (2)(a) and (b) substitute—
“(a)
the condition in section 147(1)(a) of TIOPA 2010 is met, and
(aa)
the participation condition is met (see subsection (2B)), but
(b)
either—

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 2 — Transfer pricing and advance pricing agreements
359

(i)
one of the conditions in section 147(1)(c) and (d) of
TIOPA 2010 is not met, or
(ii)
one of the exceptions mentioned in subsection (2A)
applies.”
      (6)
After subsection (2) insert—
5
“(2A)
The exceptions are those in—
(a)
section 447(5) of CTA 2009 (exchange gains or losses from
loan relationships),
(b)
section 694(8) of CTA 2009 (exchange gains or losses from
derivative contracts),
10
(c)
section 213 of TIOPA 2010 (saving for provisions relating to
capital allowances), and
(d)
section 214 of TIOPA 2010 (saving for provisions relating to
chargeable gains).
(2B)
Section 148 of TIOPA 2010 (when the participation condition is met)
15
applies for the purposes of subsection (2)(aa) as it applies for the
purposes of section 147(1)(b) of TIOPA 2010.”
122
In section 173(2) (trading stock not to be valued if paragraph 1(2) of Schedule
28AA to ICTA has effect) for “paragraph 1(2) of Schedule 28AA to ICTA”
substitute “section 147(3) or (5) of TIOPA 2010”.
20
Corporation Tax Act 2009 (c. 4)
123
CTA 2009 is amended as follows.
124   (1)
Amend section 161 (transfer pricing rules take precedence over rules about
disposals and acquisitions of trading stock not made in course of the trade
concerned) as follows.
25
      (2)
In subsection (1)(a) for “Schedule 28AA to ICTA” substitute “Part 4 of
TIOPA 2010”.
      (3)
In subsection (1)(b) for “that Schedule” substitute “that Part”.
      (4)
For subsection (2) substitute—
“(2)
For the purposes of subsection (1)(b), the relevant consideration falls
30
within Part 4 of TIOPA 2010 without falling to be adjusted under that
Part if—
(a)
the condition in section 147(1)(a) of TIOPA 2010 is met, and
(b)
the participation condition is met (see subsection (3A)), but
(c)
either—
35
(i)
one of the conditions in section 147(1)(c) and (d) of
TIOPA 2010 is not met, or
(ii)
one of the exceptions mentioned in subsection (3)
applies.”
      (5)
In subsection (3) for paragraphs (c) and (d) substitute—
40
“(c)
section 213 of TIOPA 2010 (saving for provisions relating to
capital allowances), and
(d)
section 214 of TIOPA 2010 (saving for provisions relating to
chargeable gains).”

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 2 — Transfer pricing and advance pricing agreements
360

      (6)
After subsection (3) insert—
“(3A)
Section 148 of TIOPA 2010 (when the participation condition is met)
applies for the purposes of subsection (2)(b) as it applies for the
purposes of section 147(1)(b) of TIOPA 2010.”
125
In section 162(2) (trading stock not to be valued if paragraph 1(2) of Schedule
5
28AA to ICTA has effect) for “paragraph 1(2) of Schedule 28AA to ICTA”
substitute “section 147(3) or (5) of TIOPA 2010”.
126
In section 340(7) (Schedule 28AA to ICTA does not apply to amounts
accounted for under the section) for “Schedule 28AA to ICTA” substitute
“Part 4 of TIOPA 2010”.
10
127
In section 374(3)(a) (meaning of non-qualifying territory) for “paragraph 5E
of Schedule 28AA to ICTA” substitute “section 173 of TIOPA 2010”.
128   (1)
Amend section 376(5) (interpretation of section 375) as follows.
      (2)
In the definition of “non-qualifying territory” for “paragraph 5E of Schedule
28AA to ICTA” substitute “section 173 of TIOPA 2010”.
15
      (3)
In the definition of “small or medium-sized enterprise” for “paragraph 5D of
that Schedule” substitute “section 172 of TIOPA 2010”.
129
In section 377(3)(a) (meaning of non-qualifying territory) for “paragraph 5E
of Schedule 28AA to ICTA” substitute “section 173 of TIOPA 2010”.
130
In section 407(6)(a) (meaning of non-qualifying territory) for “paragraph 5E
20
of Schedule 28AA to ICTA” substitute “section 173 of TIOPA 2010”.
131   (1)
Amend section 410(5) (interpretation of section) as follows.
      (2)
In the definition of “non-qualifying territory” for “paragraph 5E of Schedule
28AA to ICTA” substitute “section 173 of TIOPA 2010”.
      (3)
In the definition of “small or medium-sized enterprise” for “paragraph 5D of
25
that Schedule” substitute “section 172 of TIOPA 2010”.
132
In section 444(3) (section is subject to section 445) for “Schedule 28AA to
ICTA” substitute “Part 4 of TIOPA 2010”.
133   (1)
Amend section 445 (disapplication of section 444 where Schedule 28AA to
ICTA applies) as follows.
30
      (2)
In subsection (1) for “Schedule 28AA to ICTA” substitute “Part 4 of TIOPA
2010”.
      (3)
In each of paragraphs (a) and (b) of that subsection for “that Schedule”
substitute “that Part”.
      (4)
In subsection (2)(a) for “Schedule 28AA to ICTA” substitute “Part 4 of
35
TIOPA 2010”.
      (5)
In subsection (2)(b) for “that Schedule” substitute “that Part”.
      (6)
In subsection (3) for “Schedule 28AA to ICTA” substitute “Part 4 of TIOPA
2010”.
      (7)
For subsection (3)(a) substitute—
40
“(a)
the condition in section 147(1)(a) of TIOPA 2010 is met,

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 2 — Transfer pricing and advance pricing agreements
361

(aa)
the participation condition is met (see subsection (3A)), and”.
      (8)
After subsection (3) insert—
“(3A)
Section 148 of TIOPA 2010 (when the participation condition is met)
applies for the purposes of subsection (3)(aa) as it applies for the
purposes of section 147 (1)(b) of TIOPA 2010.”
5
      (9)
In subsection (4) for “Schedule 28AA to ICTA,” substitute “Part 4 of TIOPA
2010,”.
     (10)
In subsection (5) for “Schedule 28AA to ICTA (see paragraph 1 of that
Schedule)” substitute “Part 4 of TIOPA 2010 (see sections 149 and 151 of that
Act)”.
10
     (11)
In the title for “Schedule 28AA to ICTA” substitute “Part 4 of TIOPA 2010”.
134   (1)
Amend section 446 (bringing into account adjustments made under
Schedule 28AA to ICTA) as follows.
      (2)
In each of subsections (1), (2), (4) and (6), and in the title, for “Schedule 28AA
to ICTA” substitute “Part 4 of TIOPA 2010”.
15
135   (1)
Amend section 447 (exchange gains and losses on debtor relationships: loans
disregarded under Schedule 28AA to ICTA).
      (2)
In subsection (1)(c) for “paragraph 1 of Schedule 28AA to ICTA” substitute
“section 147(3) or (5) of TIOPA 2010”.
      (3)
In subsection (5) for “Schedule 28AA to ICTA” substitute “Part 4 of TIOPA
20
2010”.
      (4)
In subsection (7) for “Schedule 28AA to ICTA (see paragraph 1 of that
Schedule)” substitute “Part 4 of TIOPA 2010 (see sections 149 and 151 of that
Act)”.
      (5)
In the title for “Schedule 28AA to ICTA” substitute “Part 4 of TIOPA 2010”.
25
136
In section 452(1)(a) and (3)(a) (exchange gains and losses where loan not on
arm’s length terms) for “paragraph 6D(2) of Schedule 28AA to ICTA”
substitute “section 192(1) of TIOPA 2010”.
137
In section 455(5) (section does not apply if paragraph 1(2) of Schedule 28AA
to ICTA has effect) for “paragraph 1(2) of Schedule 28AA to ICTA”
30
substitute “section 147(3) or (5) of TIOPA 2010”.
138
In section 464(3)(a) (which refers to and describes section 445(2)) for
“Schedule 28AA to ICTA” substitute “Part 4 of TIOPA 2010”.
139
In section 484(1) (non-lending relationships treated as loan relationships:
meaning of “interest”) for “Schedule 28AA to ICTA” substitute “Part 4 of
35
TIOPA 2010”.
140
In section 508(2) (arrangements which are not alternative finance
arrangements)—
(a)
in paragraph (b) for “paragraph 1(2) of Schedule 28AA to ICTA”
substitute “subsection (3) or (5) of section 147 of TIOPA 2010”,
40
(b)
in that paragraph for “in paragraph 1(2)(a) of that Schedule”
substitute “in that subsection”, and

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 2 — Transfer pricing and advance pricing agreements
362

(c)
in paragraph (c) for “that Schedule” substitute “Part 4 of TIOPA
2010”.
141
In section 625(7) (Schedule 28AA to ICTA does not apply to amounts if
credits or debits in respect of those amounts are determined under the
section), for “Schedule 28AA to ICTA” substitute “Part 4 of TIOPA 2010”.
5
142   (1)
Amend section 693 (bringing into account adjustments under Schedule
28AA to ICTA) as follows.
      (2)
In subsections (1), (2) and (4), and the title, for “Schedule 28AA to ICTA”
substitute “Part 4 of TIOPA 2010”.
143   (1)
Amend section 694 (exchange gains and losses where derivative contracts
10
not on arm’s length terms) as follows.
      (2)
In subsections (2), (4) and (8) for “Schedule 28AA to ICTA” substitute “Part
4 of TIOPA 2010”.
      (3)
In subsection (10) for “Schedule 28AA to ICTA (see paragraph 1 of that
Schedule)” substitute “Part 4 of TIOPA 2010 (see sections 149 and 151 of that
15
Act)”.
144
In section 698(5) (section does not apply if paragraph 1(2) of Schedule 28AA
to ICTA increases company’s tax liability) for “paragraph 1(2) of Schedule
28AA to ICTA” substitute “section 147(3) or (5) of TIOPA 2010”.
145   (1)
In the provisions mentioned in sub-paragraph (2) (provisions which relate
20
to intangible fixed assets and refer to matters being subject to adjustments
under Schedule 28AA to ICTA) for “Schedule 28AA to ICTA” substitute
“Part 4 of TIOPA 2010”.
      (2)
The provisions are—
section 721(3),
25
section 728(3),
section 729(4),
section 731(5),
section 736(7),
section 739(2),
30
section 740(4),
section 742(3), and
section 743(3).
146
In section 775(3) (intangible fixed assets: transfers within a group) for
“Schedule 28AA to ICTA” substitute “Part 4 of TIOPA 2010”.
35
147   (1)
Amend section 846 (intangible fixed assets: transfers not at arm’s length) as
follows.
      (2)
In subsection (1)(a) for “Schedule 28AA to ICTA” substitute “Part 4 of
TIOPA 2010”.
      (3)
In subsection (1)(b) for “that Schedule” substitute “that Part”.
40
      (4)
In subsection (2) for “within that Schedule” substitute “within that Part”.
      (5)
For subsection (2)(a) substitute—
“(a)
the condition in section 147(1)(a) of TIOPA 2010 is met,

Taxation (International and Other Provisions) Bill
Schedule 8 — Minor and consequential amendments
Part 4 — Tax treatment of financing costs and income
363

(aa)
the participation condition is met (see subsection (2A)), and”.
      (6)
After subsection (2) insert—
“(2A)
Section 148 of TIOPA 2010 (when the participation condition is met)
applies for the purposes of subsection (2)(aa) as it applies for the
purposes of section 147 (1)(b) of TIOPA 2010.”
5
      (7)
In subsection (3) for the words after “meaning” substitute “as in that Part
(see, respectively, sections 149 and 151 of TIOPA 2010)”.
148
In section 931P(4) (section does not apply if Schedule 28AA to ICTA applies)
for “Schedule 28AA to ICTA” substitute “Part 4 of TIOPA 2010”.
Finance Act 2009 (c. 10)
10
149
FA 2009 is amended as follows.
150
In Schedule 17 (international movement of capital) in paragraph 12(5) for
“Paragraph 3 of Schedule 28AA to ICTA” substitute “Section 150 of TIOPA
2010”.
Part 3
15
Tax arbitrage
Finance (No. 2) Act 2005 (c. 22)
151
F(No.2)A 2005 is amended as follows.
152
Omit sections 24 to 28 (avoidance involving tax arbitrage).
153
Omit section 30 (interpretation of Chapter 4 of Part 2).
20
154
Omit section 31 (commencement of Chapter 4 of Part 2).
155
Omit Schedule 3 (qualifying schemes).
Part 4
Tax treatment of financing costs and income
Taxes Management Act 1970 (c. 9)
25
156
TMA 1970 is amended as follows.
157   (1)
Amend the first column of the Table in section 98 (special returns etc) as
follows.
      (2)
Omit the entry for regulations under Schedule 15 to FA 2009.
      (3)
At the appropriate place insert—
30
“Regulations under section 283, 284, 285, 295 or 297 of TIOPA
2010.”
Finance Act 2009
158
FA 2009 is amended as follows.