Blick Rothenberg

Diverted Profits Tax (“DPT”)

21.05.2015

The DPT was introduced with effect from 1 April 2015 and will apply to large multinational businesses with activities in the UK, but with arrangements intended to divert profits away from the UK so they are not subject to UK corporation tax.

The DPT is charged at 25% and applies in two cases;

1. Where there is an avoidance of a UK permanent establishment;
or
2. Where intra-group expenses lack economic substance.

The legislation is widely written and its application is potentially very broad. Businesses should therefore review their international arrangements to understand if they are within the scope of the DPT and whether this impacts on their business.

The DPT is the subject of a separate briefing note which can be found at: www.blickrothenberg.com/BR-News/Newsletters/International-Business-Review

For more information, please contact your usual Blick Rothenberg contact or Paul Smith, partner on +44 (0)20 7544 8823 or at paul.smith@blickrothenberg.com