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(This note is not part of the Regulations)
These Regulations make provision in relation to relief from double taxation in relation to the bank levy and any tax imposed by the Federal Republic of Germany which corresponds to the bank levy (“the German bank levy”).
Regulation 1 provides for citation commencement and effect. Authority for the retrospective effect of the Regulations (except for regulation 10) is provided by section 66(5) and (8) of the Finance Act 2011. Section 66(5) permits arrangements for relief from double taxation in relation to the bank levy and any equivalent foreign levy to have retrospective effect. These Regulations make provision in relation to such relief provided by the Convention between the Federal Republic of Germany and the United Kingdom of Great Britain and Northern Ireland for the avoidance of double charging of bank levies (“the Convention”; defined in regulation 2) which enters into force on the day of exchange of instruments of ratification and has effect from 1st January 2011. The date of entry into force of the arrangements will, in due course, be published in the London, Edinburgh and BelfastGazettes.
Regulation 2 defines terms used in the Regulations.
Regulation 3 provides that the Regulations apply in relation to relief from the bank levy provided by the Convention where the bank levy and the German bank levy are charged in relation to a UK permanent establishment (which is defined in regulation 1 as a permanent establishment through which a trade is carried on in the United Kingdom by a relevant foreign bank).
Regulation 4 provides that the amount of the German bank levy that is attributable to the UK permanent establishment in relation to a chargeable period is allowed as a credit to reduce the amount of the bank levy (but not to below nil) for that period.
Regulation 5 provides for the exchange rate to translate the amount of the German bank levy into its sterling equivalent.
Regulation 6 provides for the time limits for making a claim for a credit under regulation 4.
Regulation 7 provides that where the bank levy is charged in relation to a relevant group a claim for credit must be made by the responsible member.
Regulation 8 provides that the credit is only available to reduce the amount of the bank levy charged in respect of the UK permanent establishment; this amount is determined on a just and reasonable basis.
Regulation 9 provides for a reduction in the credit if a payment is made in respect of a credit for the German bank levy.
Regulation 10 makes provision for priority of credits where credits are allowed in relation to equivalent foreign levies (including the German bank levy) under these Regulations and under any Regulations made under paragraph 66 (arrangements affording double taxation relief) or paragraph 67 (power to provide for double taxation relief) of Schedule 19 to the Finance Act 2011.
Regulation 11 makes provision in relation to a claim or assessment made in consequence of an adjustment of the bank levy or the German bank levy.
Regulation 12 makes provision for a notice to be given where in consequence of an adjustment of the bank levy or the German bank levy the credit given under regulation 4 has become excessive.
Regulation 13 provides for giving effect to solutions to cases and mutual agreements resolving cases by the Commissioners for Her Majesty’s Revenue and Customs or to a competent authority in the Federal Republic of Germany resulting in a person’s being taxed (whether in the United Kingdom or the Federal Republic of Germany) otherwise than in accordance with the double taxation arrangements.
Regulation 14 makes provision in relation to the effect of, and the deadline for, presenting a case concerning an entity’s being taxed (whether in the United Kingdom or the Federal Republic of Germany) otherwise than in accordance with the double taxation arrangements.
A Tax Information and Impact Note covering this instrument was published on 23 March 2011 alongside draft legislation for the Bank Levy and is available on the HMRC website at http://www.hmrc.gov.uk/thelibrary/tiins.htm.
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