Commentary

D2.705 Exemptions

Corporate tax
Corporate tax | Commentary

D2.705 Exemptions

Corporate tax | Commentary

Entities or transactions lacking economic substance

D2.705 Exemptions

Where a DPT charge may potentially arise under the lack of economic substance rule1, there is an overriding exemption2 for small and medium enterprises. The legislation incorporates a definition of small and medium sized enterprises that is recommended by the European Commission3.

Under the EC definition4 an enterprise is small if both of the following conditions are met:

  1.  

    (a)     the enterprise has fewer than 50 employees; and

  2.  

    (b)     either (or both) its turnover and assets are no more than EUR 10 million

An enterprise is medium-sized if:

  1.  

    (i)     the enterprise has

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