HMRC have announced the opening of a new Profit Diversion Compliance facility to allow large international groups using arrangements targeted by Diverted Profits Tax (DPT) to bring their UK tax affairs up to date.

In 2017/18 the DPT , which was introduced in 2015, and imposes a 25% tax charge on profits artificially diverted from the UK, raised £388m, which was over a third more than the previous year. Under the DPT companies must notify HMRC if they are potentially within its scope and do not meet conditions for exemption, or face tax-geared penalties.

The new facility is intended to encourage corporates with arrangements that might fall within the DPT to review their transfer pricing policies, change them if appropriate, and make a disclosure to HMRC with proposals to pay any additional tax, interest and penalties due.

Links to our guides:

Diverted profits tax

BEPS & Diverted Profits Tax (for SME owners) 

External links:

Profit Diversion Compliance Facility guidance

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