Taxation (International and Other Provisions) Act 2010 section 259BB

Meaning of "payment", "quasi-payment", "payer", "payee" etc

Section 259BB defines the key terms used throughout Part 6A of the Act, including "payment", "quasi-payment", "payer", "payee" and related concepts such as "relevant deduction", "payment period", "payer jurisdiction" and "payee jurisdiction".

• A "payment" is any transfer of money or money's worth from one person to another where the payer can claim a tax deduction; a "quasi-payment" arises where a deduction exists and income would reasonably be expected to arise to another person, even without a direct transfer.
• A quasi-payment does not arise if the deduction is merely a deemed amount for tax purposes and there are no substantive economic rights between the parties involved.
• The "payee" is the person who receives the transfer or to whom ordinary income arises (or would reasonably be expected to arise), and in certain circumstances — such as where a branch is treated differently under different jurisdictions' laws — the payer can also be a payee.
• The "payer jurisdiction" is the territory whose law allows the relevant deduction, and the "payee jurisdiction" is any territory where the payee is tax resident or has a permanent establishment.