Part 15Deduction of income tax at source
Chapter 8Chapters 6 and 7: special provision in relation to royalties
Discretion to make payments gross
914EU companies: discretion to make payment gross
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.