Income Tax Act 2007 (c. 3)

Part 15 U.K. Deduction of income tax at source

Modifications etc. (not altering text)

C1 Pt. 15 modified (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), ss. 551(4), 1329(1) (with Pts. 1, 2, Sch. 2 para. 78)

Chapter 8 U.K. Chapters 6 and 7: special provision in relation to royalties

Discretion to make payments gross U.K.

914 EU companies: discretion to make payment gross U.K.

(1) This section applies if—

(a) a company makes a royalty payment and, at the time the payment is made, the company reasonably believes that the payment is exempt from income tax as a result of section 758 of ITTOIA 2005 (exemption for certain interest and royalty payments), but

(b) there is a duty to deduct a sum representing income tax from the payment under section 903(7) or 906 if the payment is not in fact exempt.

(2) The company may make the payment without deducting a sum representing income tax under section 903(7) or 906 (as the case may be).

(3) But if the payment is not in fact exempt from income tax as a result of section 758 of ITTOIA 2005, this Part has effect as if subsection (2) had never applied in relation to the payment.