Revenue Note for Guidance
This section sets out what is meant by tax residency double deduction mismatch outcome and provides the rule to neutralise such an outcome.
(1) Tax residency double deduction mismatch outcome
A tax residency double deduction mismatch outcome shall arise
where—
(2) The rule for neutralising a tax residency double deduction mismatch outcome
Where the other territory–
then notwithstanding any other provision of the Acts, the mismatch outcome shall be neutralised by the company being denied a tax deduction for so much of the payment as corresponds to the double deduction mismatch outcome which has not been neutralised in another territory.
(3) Where the tax residence of a company must be determined by mutual agreement
Where the tax residence of a company must be determined by mutual agreement between the competent authorities of both territories which are party to a DTA, then any adjustment to the return, filed pursuant to section 959I (obligation to make a return), required to give effect to subsection (2) shall be made without unreasonable delay upon that agreement, notwithstanding any time limits in Part 41A (Assessing Rules Including Rules for Self-Assessment).
Relevant Date: Finance Act 2019