835YA Non-cooperative jurisdictions: modified application of sections 835T, 835U and 835V

Summary

This section provides that the exemptions from a CFC charge provided for in section 835T (the Effective tax rate exemption), section 835U (the Low profit margin exemption) and section 835V (the Low accounting profit exemption) will not apply for an accounting period of a CFC where that CFC is resident in a jurisdiction included on the EU list of non-cooperative jurisdictions for tax purposes.

Details

(1) (1)(a) & (b) Subsection (1)(a) provides that, for the purposes of this section, a ‘listed territory’ in respect of the period 1 January 2021 to 31 December 2021 means a territory included in Annex 1 of the “EU list of non-cooperative jurisdictions for tax purposes – Report by the Code of Conduct (business taxation) suggesting amendments to the Annexes to the Council conclusions of 18 February 2020” as published in the Official Journal No. C331 on 7 October 2020.

Subsection 1(b) provides that for accounting periods beginning on or after 1 January 2022, a ‘listed territory’ means a territory listed in Annex 1 of the Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes as published in the Official Journal No. C413I on 12 October 2021.

(2) Subsection (2) provides that where a CFC is resident for an accounting period in a territory referred to in subsection (1) of this section that the exemptions from a CFC charge provided for in section 835T (the Effective tax rate exemption), section 835U (the Low profit margin exemption) and section 835V (the Low accounting profit exemption) will not apply in respect of that accounting period of the CFC.

Section (2) of section 20 of the Finance Bill 2020 is the commencement section and provides that section 835YA shall apply in respect of an accounting period of a CFC beginning on or after 1 January 2021.

Relevant Date: Finance Act 2021