SCHEDULES

SCHEDULE 19U.K.Income tax credits for foreign distributions

ITTOIA 2005U.K.

5U.K.After that section insert—

397BAMeaning of “qualifying territory”

(1)For the purposes of section 397AA “qualifying territory” means—

(a)the United Kingdom, or

(b)a territory within subsection (2).

(2)A territory is within this subsection if—

(a)arrangements to which section 788 of ICTA applies (“double taxation relief arrangements”) have effect in relation to the territory, and

(b)the arrangements contain a non-discrimination provision.

(3)The Treasury may by regulations—

(a)provide that a territory specified in or of a description specified in the regulations that does not satisfy subsection (2)(a) or (b) is a qualifying territory for the purpose of section 397AA, and

(b)provide that a territory so specified or described that satisfies subsection (2)(a) or (b) is not a qualifying territory for that purpose.

(4)For the purposes of section 397AA a company is a resident of a territory if, under the laws of the territory, the company is liable to tax there—

(a)by reason of its domicile, residence or place of management, but

(b)not in respect only of income from sources in that territory or capital situated there.

(5)In subsection (2) “non-discrimination provision”, in relation to double taxation relief arrangements, means a provision to the effect that nationals of a state which is a party to those arrangements (a “contracting state”) are not to be subject in any other contracting state to—

(a)any taxation, or

(b)any requirement connected with taxation,

which is other or more burdensome than the taxation and connected requirements to which nationals of that other state in the same circumstances (in particular with respect to residence) are or may be subjected.

(6)In subsection (5) “national”, in relation to a contracting state, includes—

(a)an individual possessing the nationality or citizenship of the contracting state, and

(b)a legal person, partnership or association deriving its status as such from the laws in force in that contracting state.

(7)Regulations under this section may—

(a)describe a territory by reference to the double taxation relief arrangements for the time being in force in relation to the territory,

(b)make different provision in relation to different descriptions of company, and

(c)make provision having effect in relation to the tax year current on the day on which the regulations are made.

(8)No regulations may be made under this section unless a draft of the instrument containing them has been laid before, and approved by a resolution of, the House of Commons.