Commentary

A4.450 Background—payments to associated EU companies

Administration and compliance

A4.450 Background—payments to associated EU companies

Payments to an associated EU resident company

A4.450 Background—payments to associated EU companies

ITTOIA 2005, ss 757–767 gave effect to the EU Interest and Royalties Directive 2003/49/EC in respect of payments made by a company resident in the UK or by a UK permanent establishment of an EU state. It provided for the payment of most interest and royalty payments by a UK company or a UK permanent establishment of an EU company to an associated company in an EU member state without deduction of tax.

Following the end of the implementation period for the UK to leave the EU (at 11pm (GMT) on 31 December 2020, referred to as 'IP completion day'), the EU interest and Royalties Directive ceased to have effect.

HMRC published guidance Receiving interest, royalties or dividends payments from the EU to remind taxpayers that, from 1 January 2021, some EU countries may start to

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