Textual Amendments
F1Pt. 6A inserted (with effect in accordance with Sch. 10 paras. 18-21 of the amending Act) by Finance Act 2016 (c. 24), Sch. 10 para. 1
(1)This Chapter applies if conditions A to E are met.
(2)Condition A is that a payment or quasi-payment is made under, or in connection with, an arrangement.
(3)Condition B is that a payee is a multinational company.
(4)For the purposes of this Chapter, a company is a “multinational company” if—
(a)it is resident in a territory (“the parent jurisdiction”) for tax purposes under the law of that territory, and
(b)it is regarded as carrying on a business in another territory (“the PE jurisdiction”) through a permanent establishment in that territory (whether it is so regarded under the law of the parent jurisdiction, the PE jurisdiction or any other territory).
[F2(5)Condition C is that—
(a)the payer is within the charge to corporation tax for the payment period, or
(b)the multinational company—
(i)is UK resident for the payment period, and
(ii)under the law of the parent jurisdiction, is regarded as carrying on a business in the PE jurisdiction through a permanent establishment in that territory but, under the law of the PE jurisdiction, is not regarded as doing so.]
(6)Condition D is that it is reasonable to suppose that, disregarding the provisions mentioned in subsection (7), there would be a multinational payee deduction/non-inclusion mismatch in relation to the payment or quasi-payment (see section 259HB).
(7)The provisions are—
(a)this Chapter and Chapters 9 and 10, and
(b)any equivalent provision under the law of a territory outside the United Kingdom.
(8)Condition E is that—
(a)it is a quasi-payment that is made as mentioned in subsection (2) and the payer is also a payee (see section 259BB(7)),
(b)the payer and the multinational company are in the same control group (see section 259NB) at any time in the period—
(i)beginning with the day on which the arrangement mentioned in subsection (2) is made, and
(ii)ending with the last day of the payment period, or
(c)that arrangement is a structured arrangement.
(9)The arrangement is “structured” if it is reasonable to suppose that—
(a)the arrangement is designed to secure a multinational [F3payee] deduction/non-inclusion mismatch, or
(b)the terms of the arrangement share the economic benefit of the mismatch between the parties to the arrangement or otherwise reflect the fact that the mismatch is expected to arise.
(10)The arrangement may be designed to secure a multinational payee deduction/non-inclusion mismatch despite also being designed to secure any commercial or other objective.
(11)Section 259HC contains provision for the counteraction of the multinational payee deduction/non-inclusion mismatch.]
Textual Amendments
F2S. 259HA(5) substituted (with effect in accordance with s. 19(5)(6) of the amending Act) by Finance Act 2019 (c. 1), s. 19(2)(a)
F3Word in s. 259HA(9)(a) substituted (retrospective to 15.9.2016) by the Finance Act 2019 (c. 1), s. 19(2)(b)(7)