I’m concerned about the UK’s diverted profits tax (DPT) and whether it applies to my non-resident company. What is DPT, and under what circumstances does it impact businesses?
Answer by: abdullah-al-naim
2 months ago
The UK’s Diverted Profits Tax (DPT) aims to counteract tax avoidance by multinational companies that artificially shift profits out of the UK to reduce their tax liabilities.
Key points about DPT:
* The rate is 31%, higher than the Corporation Tax rate.
* It applies if:
– A non-resident company exploits the UK\’s tax treaty network to divert profits.
– There are arrangements lacking economic substance designed to avoid UK taxes.
To assess if DPT applies, evaluate your business structure and transactions. Non-resident companies engaging with UK-related activities must ensure compliance by reviewing their tax strategies with professional advisors.
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