Finance Act 2019

Calculation of taxable diverted profits

6 (1) Section 88 (calculation of taxable diverted profits in section 86 case: introduction) is amended as follows.

(2) After subsection (5A) insert—

“(5B) In calculating the notional PE profits no account is to be taken of any adjustment within subsection (5C).

(5C) An adjustment is within this subsection if—

(a) it is an adjustment required to be made under Part 4 of TIOPA 2010 to the results of any provision made or imposed between the foreign company and the avoided PE,

(b) it is taken into account in an assessment to corporation tax included in a company tax return of the avoided PE, and

(c) the time when it is first taken into account as mentioned in paragraph (b) is after the end of the review period.”

(3) In subsection (9)(a) omit “(ignoring Part 4 of TIOPA 2010 (transfer pricing)”.

(4) After subsection (9) insert—

“(9A) For the purposes of subsection (9)(a) ignore any adjustment that would be required to be made to the results of the material provision under Part 4 of TIOPA 2010 in calculating what would have been the notional PE profits for the accounting period.”