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

Overview of Chapter

Section 259J provides an overview of the rules that counteract double deduction mismatches arising where a company is either a dual resident company or a relevant multinational company operating through a permanent establishment.

• The chapter targets situations where a company's expenses or losses could be deducted twice — once in the UK and once in another jurisdiction — because the company is either resident in two territories (a dual resident company) or is a multinational operating through a permanent establishment in a different territory.
• The mismatch is counteracted by adjusting the company's UK corporation tax treatment, effectively denying or restricting the duplicate deduction.
• Where the company is a multinational and the UK is the parent jurisdiction, the UK acts first to deny the double deduction; where the UK is instead the permanent establishment jurisdiction, the UK only counteracts the mismatch if the parent jurisdiction has not already done so under an equivalent rule.
• Key definitions — including dual resident company, relevant multinational company, parent jurisdiction, PE jurisdiction, dual territory double deduction amount, and permanent establishment — are set out in associated sections of the chapter.