The Income Tax (Paying and Collecting Agents) (Amendment) Regulations 1997

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Income Tax (Paying and Collecting Agents) Regulations 1996 (“the principal Regulations”).

Regulation 1 provides for citation and commencement, and regulation 2 for interpretation.

Regulations 3 to 5 insert additional definitions in regulation 2 of the principal Regulations and amend the definition of “eligible person” in that regulation by adding further categories to that definition.

Regulation 6 inserts regulations 2A to 2N in the principal Regulations which list categories of payments of foreign dividends made by paying agents (“relevant payments”), and categories of receipts of foreign dividends or quoted Eurobond interest by collecting agents (“relevant receipts”), in respect of which those agents are not liable to account for income tax.

Regulation 7 inserts regulation 3A in the principal Regulations which provides that the exemption from liability to account for tax on manufactured overseas dividends paid or accounted for to, or at the direction of, a depositary for a recognised clearing system shall not apply unless the depositary makes a declaration in the terms set out in the regulation.

Regulation 8 amends regulation 4(1) of the principal Regulations (declaration by eligible person or appropriate person) so as to exclude certain categories of non-chargeable relevant payments or receipts from the ambit of the regulation.

Regulation 9 amends regulation 6 of the principal Regulations so as to require additional information to be contained in a declaration by an appropriate person in relation to relevant payments or relevant receipts payable to him or at his direction.

Regulation 10 inserts regulations 6A and 6B in the principal Regulations which provide for the making of a declaration by an overseas dividend manufacturer where regulation 2N applies (relevant receipts corresponding to manufactured overseas dividends).

Regulation 11 inserts three regulations in the principal Regulations—regulation 8A (additional information to be contained in certificates by paying and collecting agents concerning chargeable payments and chargeable receipts); regulation 8B (set off of foreign withholding tax against tax payable by paying and collecting agents); and regulation 8C (prevention of double accounting where more than one person is a collecting agent in relation to the same dividend).

Regulations 12 and 13 amend regulations 10, 14, 15 and 16 of the principal Regulations so as to include references to declarations under regulations 3A and 6A of the principal Regulations (inserted by regulations 7 and 10 of these Regulations).