Income Tax Act 2007 section 981A

Offshore receipts in respect of intangible property: exception from duties to deduct

Section 981A provides an exemption from the normal obligation to deduct income tax at source when making certain payments that relate to offshore receipts connected with intangible property.

• Payments falling within Chapter 2A of Part 5 of ITTOIA 2005 are exempt from the usual duty to deduct income tax at source.
• Chapter 2A deals specifically with offshore receipts in respect of intangible property, such as royalties or licence fees paid to offshore entities for the use of intellectual property.
• Where a payment is covered by this chapter, the payer is not required to withhold any amount representing income tax before making the payment.
• This exception overrides the general withholding tax obligations that would otherwise apply under the Income Tax Act 2007.

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