UK updates CFC excluded territories exemption
07 August 2012
Matthew Gilleard - ITR
The UK Treasury has revised the draft regulations for the excluded territories exemption (ETE) of the controlled foreign companies (CFC) regime.
The purpose of the ETE within the CFC regime is to exempt CFCs that are resident in territories where the CFC’s income is taxed at a rate broadly similar to that of the UK main corporate tax rate.
Excluded territories exemption
“The ETE is one of a number of full exemptions from a CFC charge designed to lower the administrative burden of complying with the regime in situations where the risk of artificial diversion of taxable profits from the UK is considered low,” said Jonathan Hornby, of Alvarez & Marsal Taxand. “Notably, where the CFC’s profits include amounts attributable to intellectual property (IP) that was previously held in the UK, this exemption is not available.”
The regulations provide the list of excluded territories for the purposes of the ETE, and set out a simplified...
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