Section 18H | What are “diverted profits”?

(1)In section 18G(1)(b) “diverted profits” means so much of company X's total profits of period X as pass through the diverted profits gateway.

(2)To determine the extent to which company X's total profits of period X pass through the diverted profits gateway, apply—

(a)section 371BB of TIOPA 2010 (controlled foreign companies: the CFC charge gateway), and

(b)except Chapter 8 of Part 9A of that Act, the other provisions referred to in that section,

as if references to the CFC charge gateway were references to the diverted profits gateway.

(3)In applying section 371BB of TIOPA 2010 and the other provisions referred to in it assume—

(a)that company X is a CFC resident in territory X,

(b)that period X is the CFC's accounting period, and

(c)that company X's total profits of period X are the CFC's assumed total profits for the accounting period.

(4)Subsection (3)(a) does not require it to be assumed that there is any change in the place or places at which company X carries on its activities.

(5)Section 371BB of TIOPA 2010 and the other provisions referred to in it are also to be applied subject to sections 18HA to 18HE below.

(6)In this section—

(a)references to company X's total profits of period X are to those profits ignoring this Chapter and step 2 in section 4(3) of CTA 2010, and

(b)references to section 371BB of TIOPA 2010 are to that section omitting subsection (2)(b).