Income Tax Act 2007 Explanatory Notes

Section 911: Double taxation arrangements: deduction at treaty rate

2777.This section sets out the conditions under which a company may deduct sums representing income tax on the royalty payment at the treaty rate. It is based on section 349E(1), (2) and (5) of ICTA.

2778.Subsection (3) states that if, despite the reasonableness of the company’s belief, the payee is not in fact entitled to double tax relief, the right to deduct at the treaty rate is treated as never having existed.

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