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

Circumstances in which the Chapter applies

Section 259JA sets out the two conditions that must both be met for the dual territory double deduction rules in Chapter 10 to apply, and defines the key concepts of a dual resident company and a relevant multinational company.

• The rules apply where a company is either a dual resident company (UK resident but also subject to tax in another territory) or a relevant multinational company (taxable in a territory where it has a permanent establishment, with either the PE jurisdiction or the parent jurisdiction being the UK).
• A dual territory double deduction arises where, ignoring these rules and any foreign equivalents, the same amount could reasonably be expected to be deducted from the company's income for both UK corporation tax purposes and for the purposes of a foreign tax.
• Both conditions must be satisfied: the company must fall within one of the two categories (Condition A), and there must be an amount that qualifies as a dual territory double deduction (Condition B).
• Where both conditions are met, the dual territory double deduction amount is counteracted under one of three provisions depending on whether the company is dual resident, a relevant multinational with the UK as parent jurisdiction, or a relevant multinational with the UK as the PE jurisdiction.