Commentary

B5.319 Payment of royalties without deduction of tax

Business tax
Business tax | Commentary

B5.319 Payment of royalties without deduction of tax

Business tax | Commentary

B5.319 Payment of royalties without deduction of tax

A UK company is normally required to deduct income tax at the basic rate when making a payment of interest or royalty, and to account to HMRC1 for the tax deducted.

UK withholding tax may be reduced under double tax treaties (DTT) or (for payments made before 1 June 2021) European directives, both of which may be subject to making a formal claim.

Following Brexit, 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 deduct tax. Taxpayers

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