A round up of other news this week.
The Corporation Tax Act 2010 (Part 8C) (Amendment) Regulations 2017 have been published. These Regulations amend the legislation on the 45 percent rate of corporation tax applied to restitution interest paid by HMRC so that this rate does not apply to charitable companies and amounts representing income of policyholders of with profits funds, as well as strengthening certain anti-avoidance provisions.
The Finance Act 2016, Section 164 (Appointed Day) Regulations, The Finance Act 2016 (Schedule 21) (Appointed Days) Regulations 2017, and The Finance Act 2016 (Schedule 22) (Appointed Days) Regulations 2017 have been published. These Regulations set the appointed day to bring into force certain provisions of Finance Act 2016 which introduce the new asset based penalty for offshore irregularities. Only taxpayers who make full, unprompted disclosures are now protected from naming and shaming by HMRC where deliberate behaviour is concerned. Individuals that control companies and partnerships that are penalised for deliberate failures or errors relating to offshore matters can also be named.
KPMG in the UK’s BEPS Action 4 diary has been updated recently with posts on how the new corporate interest restriction (CIR) regime interacts with tonnage tax, as well as the impact on the infrastructure sector, and information on the ongoing consultation process.
The Government has responded to the Public Accounts Committee (PAC) Twenty Ninth Report on HMRC’s performance in 2015/16, agreeing with the committee's recommendations.
On 8 March 2017 the Court of Justice of the European Union (CJEU) rendered its decision in the Belgische Staat v. Comm. VA Wereldhave Belgium case, which concerned the applicability of the EU Parent-Subsidiary Directive to a withholding tax imposed by Belgium on dividends paid by a Belgian subsidiary to its parent companies located in the Netherlands, which were investment funds (UCITS). The CJEU ruled that neither of the UCITS in question qualified as a ‘company of a Member State’ for the purposes of Article 2(c) of the Directive since, although subject to corporate income tax, they were effectively not taxed. Therefore the Directive did not preclude Belgium from taxing the dividends.
The CJEU has made its decision in the Société Euro Park Service case, which concerned the refusal by France to defer taxing the capital gains on a French company’s assets at the time of its merger with a company established in another Member State, on the grounds that the merging companies had not sought the prior approval of the French tax authority and that the merger had been carried out for the purposes of tax evasion or avoidance. The CJEU ruled that the derogation from the tax deferral provided for in Article 11(1)(a) of the EU Merger Directive is to be interpreted restrictively.
The UK/Germany Bank Levy Double Taxation Agreement was terminated on 20 February 2017 with effect from 1 January 2015, the date of entry into force of EU Directive 2014/59
UK plc’s M&A war chest is set to burgeon over the next 12 months as companies continue to look to deals to fuel growth, according to KPMG International’s 2017 Global M&A Predictor.