UK government releases Finance Bill 2015 including final text of diverted profits tax

As expected, the UK government on March 24 published Finance Bill 2015, including the final version of its controversial new diverted profits tax.

Provisions granting HMRC power to issue regulations to introduce country-by-country reporting requirements for MNEs consistent with OECD guidance were also included in the package.

The bill is expected to receive Royal Assent on Thursday. The diverted profits tax will go into effect April 1.

The proposed 25 percent tax on diverted profits, announced in the UK Autumn statement 2014 and released as a draft law December 10, 2014, targets large MNEs that exploit permanent establishment rules or that reduce their tax liability through transactions or entities that lack economic substance.

See:

• Finance Bill 2015

• Finance Bill 2014: explanatory notes

Related MNE Tax articles:

• UK to modify proposed diverted profits tax notification rule, exclusion for loans

• UK Treasury official responds to critics of controversial diverted profits tax

• UK diverted profits tax hits MNEs that avoid PE rules, route profits through tax havens

• UK proposes MNE “diverted profits” tax, releases consultation on hybrid mismatches