INTM556090 | Hybrids: multinational payee (Chapter 8): counteraction

Payer is within the charge to CT

The counteraction where the payer is within the charge to UK corporation tax is set out at s259HC TIOPA 2010. The payer’s deduction for the payment period is reduced by an amount equal to the multinational payee deduction/non-inclusion mismatch.

From 1 January 2020: Payee is a UK resident multinational company

If the payee that is a multinational company

• is UK resident for the payment period, and

• under the law of the parent jurisdiction is regarded as carrying on a business in a PE jurisdiction through a permanent establishment in that territory, but

• is not regarded as doing so by the law of that jurisdiction

an amount equal to the multinational payee deduction/non-inclusion mismatch is treated as arising to the multinational company ion the UK and nowhere else for the payment period.