Taxation (International and Other Provisions) Act 2010 section 38

Credit against tax on royalties: further rules

Section 38 provides supplementary rules for calculating the double taxation credit limit where royalties are paid in respect of an asset across more than one foreign country.

• This section applies only where double taxation arrangements are in place and royalties (as defined in those arrangements) are paid in respect of an asset in more than one foreign jurisdiction.
• When calculating the credit limit under section 36(2), royalty income arising in multiple foreign jurisdictions in a single tax year in respect of the same asset is treated as one single item of income.
• The foreign tax credits available on that royalty income from the different jurisdictions are added together accordingly.
• A "foreign jurisdiction" means any jurisdiction outside the United Kingdom.