Part 15Deduction of income tax at source
Chapter 8Chapters 6 and 7: special provision in relation to royalties
Deduction at special rates
911Double taxation arrangements: deduction at treaty rate
1
This section applies if—
a
a company pays a royalty from which it is required to deduct a sum representing income tax under Chapter 6 or 7,
b
the income tax in respect of the payment is collectible under Chapter 15 or 16, and
c
the company reasonably believes that, at the time the payment is made, the payee is entitled to relief in respect of the payment under double taxation arrangements.
2
The company may calculate the sum to be deducted from the payment under Chapter 6 or 7 by reference to the treaty rate.
3
But, if the payee is not at the time entitled to such relief, this Part has effect as if subsection (2) had never applied in relation to the payment.
4
In this section “the treaty rate” means the rate of income tax appropriate to the payee under the arrangements.