The UK, on December 9, published draft tax guidance to clarify aspects of hybrid mismatch legislation which will take effect January 1, 2017.
The legislation, introduced by Finance Act 2016, and the associated draft guidance are designed to combat multinational corporation tax avoidance by neutralizing the tax benefits associated with the use of hybrid financial instruments, hybrid entities, arrangements involving permanent establishments, hybrid transfers, and dual resident companies
The UK government said that the regulations contain examples based on those in the OECD/G20 base erosion profit shifting (BEPS) plan final reports on hybrid mismatches. Additional draft examples are provided dealing with hybrid transfers and permanent establishments, the government said.
Comments on the draft guidance are invited by March 10, 2017.
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