835AQ Tax residency double deduction mismatch outcome.
(1) A tax residency double deduction mismatch outcome shall arise where—
(a) there is, or but for this section would be, a double deduction arising in respect of a payment, to the extent the amount of the deduction is not, or would not be, deductible against dual inclusion income, and
(b) the satisfaction of the condition described in paragraph (a) is attributable to the company being within the charge to both corporation tax and foreign tax.
(2) Subject to subsection (3), a tax residency double deduction mismatch outcome shall be neutralised—
(a) where the other territory within which the company is subject to a charge to tax is a Member State, with the government of which arrangements having the force of law by virtue of section 826(1) have been made, and under those arrangements the company is tax resident in that Member State,
(i) the other territory within which the company is subject to a charge to tax is not a Member State, and
(ii) under arrangements, having the force of law by virtue of section 826(1), with the government of that other territory—
(I) the company is not tax resident in the State, or
(II) the company is tax resident in the State but a deduction has not been denied in the other territory through the operation of a provision similar to this Chapter,
(c) where the other territory within which the company is subject to a charge to tax is not a territory referred to in paragraph (a) or (b),
notwithstanding any other provision of the Tax Acts and the Capital Gains Tax Acts, by the company being denied a deduction for the purposes of domestic tax for so much of the payment as corresponds to the mismatch outcome which has not been neutralised in another territory.
(3) Where the tax residence of a company must be determined by mutual agreement between the competent authorities of both territories which are party to an arrangement referred to in subsection (2)(a) or (b), then any adjustment to the return, filed pursuant to section 959I, required to give effect to subsection (2) shall be made without unreasonable delay upon that agreement, notwithstanding any time limits in Part 41A.