IEIM541100 - Action 5 rulings: Types of rulings to exchange: Ruling related to a preferential regime

»Ê¹ÚÌåÓýapp term ‘preferential regimesâ€� refers to the definition given in Chapter 5 of the 2015 Final Report of Action 5.

In the spirit of international cooperation and transparency, HMRC has agreed to provide cross-border customer-specific rulings on Patent Box and Tonnage Tax under this heading; although the UK does not agree that they are preferential regimes. »Ê¹ÚÌåÓýappre are no other areas of UK taxation that fall into the category of preferential regimes.

Relevant jurisdictions with which the ruling will be exchanged will be:

  • »Ê¹ÚÌåÓýapp jurisdiction of residence of the ultimate parent company
  • »Ê¹ÚÌåÓýapp jurisdiction of residence of the immediate parent company
  • »Ê¹ÚÌåÓýapp jurisdiction(s) of residence of all related parties with which the customer enters a transaction (IEIM540400)

»Ê¹ÚÌåÓýapp related parties for this heading are those meeting the 25% threshold which are:

  • Parties with which the customer enters into a transaction for which a preferential treatment is granted
  • Parties to a transaction which gives rise to income benefiting from a preferential treatment (this rule also applies in the context of a permanent establishment)

Example distinguishing when to exchange under Action 5

Some of the profits of a company are agreed to fall with the patent box regime. »Ê¹ÚÌåÓýapp company seeks a non-statutory clearance on a wholly-domestic Corporation Tax issue relating to profits that fall outside the patent box. »Ê¹ÚÌåÓýapp clearance is given. It is not exchangeable under Action 5 (not related to the patent box).