Introduction Details of the Section
2.Subsection (1) applies subsection (2) where a company has paid corporation tax or equivalent foreign taxes by reference to its profits.
3.Subsection (2) permits a just and reasonable credit for the tax referred to in subsection (1) to be given against a liability to diverted profits tax, where both taxes are in respect of the same profits. The credit is allowed against the diverted profits tax charge of the company that has paid the tax referred to in subsection (1), or against the diverted profits tax charge that another company has in respect of the profits on which the tax referred to in subsection (1) was paid.
4.Subsection (3) applies subsection (4) where a company has paid a CFC charge (or similar foreign tax charge) which is calculated by reference to profits of another company.
5.Subsection (4) permits a just and reasonable credit for tax referred to in subsection (3) to be given against a liability to diverted profits tax, where both taxes are in respect of the same profits.
6.Subsection (5) prescribes two circumstances in which no credit may be given under this section against a liability to diverted profits tax. Firstly, no credit may be given for any tax paid after the end of the review period in respect of the charging notice which imposed the charge to diverted profits tax. Secondly, where the charge to diverted profits tax was imposed by a supplementary charging notice, no credit may be given for any tax paid after the review period within which that notice was issued.
7.Subsections (6) and (7) treat withholding tax, for the purposes of subsection (1), as corporation tax (or a corresponding overseas tax) paid by the person receiving the payments on which the tax is withheld (rather than as tax paid by the person making those payments), provided the withholding tax is not refunded, and explain when withholding tax is refunded for these purposes.