Diverted profits tax

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ARCHIVED: This archived Practice Note provides information on the Diverted Profits Tax (DPT) regime, which was repealed with effect for accounting periods beginning on or after 1 January 2026. DPT applied to accounting periods beginning between 1 April 2015 and 31 December 2025. The regime was replaced by the unassessed transfer pricing profits (UTPP) rules (set out in Schedule 5 to the Finance Act 2026). This Practice Note is not maintained and is for background information only.

The Diverted Profits Tax (DPT) provisions are included in Part 3 of, and Schedule 16 to, the Finance Act 2015. The legislation provides for a tax aimed at preventing the avoidance of UK tax by multinationals operating in the UK.

The current, main, rate of DPT is 31% of the diverted profit, which is deliberately set higher than the main corporation tax rate. DPT applies to diverted profits arising on or after 1 April 2015. There are apportionment rules for accounting periods that straddle that date.

DPT is a separate, stand-alone, charge on 'diverted profits'. It is not, therefore, income tax, capital gains tax or corporation

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