Global

Details

  • Service: Tax, International Corporate Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 8/10/2012

United Kingdom - New CFC and patent box regimes 

August 10: The UK's Finance Act 2012 includes a new controlled foreign company (CFC) regime and a new “patent box” regime. 
  • Excluded territories exemption (ETE) to replace excluded countries exemption: One of several exemptions in the new CFC regime is the ETE for CFCs that are resident in territories where their income is taxed generally at the same rate as would apply in the UK. The ETE replaces the “excluded countries exemption” that was part of the old regime. The UK government published draft regulations that: (1) provide the list of excluded territories for the purposes of the ETE; and (2) set out an optional simplified ETE that is available for CFCs resident in Australia, Canada, France, Germany, Japan, and the United States if certain requirements are met.
  • Lower corporation tax rate for profits earned from certain inventions: The new “patent box” regime provides that profits earned after 1 April 2013 from a company’s patented inventions and certain other innovations will be taxed at a lower corporate tax rate. HM Revenue & Customs posted an on-line guide which explains who can elect the patent box regime, which patents are eligible, and how and when to make a claim.

Read an August 2012 report [PDF 124 KB] prepared by the KPMG member firm in the United Kingdom: Weekly Tax Matters (10 August 2012)


Other topics discussed include:


  • Meaning of the term “loan” – implications of Aspect Capital
  • VAT: The place of supply of services connected to land



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