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| Business Announcements
those taxing rights have been given up
under a double taxation agreement or the
EU interest and royalties directive.
The reforms seek to:
•
apply a wider deinition of royalty
payments that are subject to UK
withholding tax
•
create a domestic anti-treaty abuse
provision which will prevent, for example
royalty payments being paid to tax
havens without deduction of tax
•
ensure that UK withholding tax will
apply to payments that are attributable
to a UK permanent establishment, even
where the royalty payment is not made
in the UK.
CORPORATION TAX
PAYMENT DATES
Plans to bring forward the corporation tax
payment dates for those companies with
proits over £20 million are to be delayed.
The rules will now apply to accounting
periods starting on or after 1 April 2019
and will require these companies to pay tax
in instalments in the third, sixth, ninth and
twelfth months of the year.
CORPORATION TAX
ANTI-HYBRID RULES
New measures will be introduced from
1 January 2017 to address hybrid
mismatch arrangements, which will prevent
multinational enterprises avoiding tax
through the use of certain cross-border
business structures or inance transactions.
PATENT BOX COMPLIANCE
WITH NEW INTERNATIONAL
RULES
The operation of the patent box will be
modiied to comply with a new set of
international rules created by the OECD.
The new rules will make the lower tax rate
dependent on, and proportional to, the
extent of the research and development
expenditure incurred by the company
claiming the relief. This change comes into
effect from 1 July 2016.
RESEARCH AND
DEVELOPMENT RELIEF
The way in which a large company obtains
research and development relief has
changed, and therefore this measure
ensures that despite this change SMEs
continue to beneit from the calculation
which is required by statute. Without
introducing these changes, this beneit
would not apply for SMEs covering the
period after 1 April 2016.
CORPORATION TAX AND
VACCINE RESEARCH RELIEF
Vaccine research relief will end when
its state aid approval runs out on
31 March 2017.
CORPORATION TAX FOR
MUSEUMS AND GALLERIES
A new tax relief for museums and galleries
will be introduced from 1 April 2017.
Consultation will take place on the new
relief over summer 2016.
CORPORATION TAX AND
ORCHESTRA TAX RELIEF
As previously announced in Budget 2015,
tax relief at a rate of 25% on qualifying
expenditure will be available to orchestras
from 1 April 2016.
CORPORATION TAX AND
INSURANCE LINKED
SECURITIES
The government is consulting on proposals
for a new, competitive framework for
insurance linked securities business.
Insurance linked securities are a means of
transferring insurance risk to capital
market investors.
Detailed regulations will be developed in
consultation with stakeholders following the
publication of the primary legislation and
conclusion of the consultation on general
proposals which began on 1 March 2016.
TRADING INCOME RECEIVED
IN NON-MONETARY FORM
Legislation will be introduced in Finance Bill
2016 to conirm that trading income and
property income received in
non-monetary form is fully brought into
account in calculating taxable proits for
income tax and corporation tax purposes.
The measure will have effect in relation to
trading and property business transaction
occurring on or after 16 March 2016 and is
intended to clarify existing laws on
the matter.
SECURITISATION AND ANNUAL
PAYMENTS
Legislative changes will amend regulations
to clarify the tax treatment of residual
payments made by securitisation
companies, conirming that they can be
paid without withholding tax.
ENTERPRISE ZONES AND
CAPITAL ALLOWANCES
Companies investing in plant and
machinery in designated enhanced capital
allowance sites in enterprise zones are able
to invest in new plant and machinery and
can qualify for 100% capital allowances for
8 years.
TRANSFER PRICING
GUIDELINES
A measure is introduced to amend the
references within the relevant legislation
to incorporate the most recent revisions
to the OECD guidelines which are the
internationally agreed standard for
application of the arm’s length principle for
transfer pricing purposes.
This measure is directed toward those who
are subject to the transfer pricing rules
in respect of a transaction (or series of