Commentary

D2.719 Calculation of DPT

Corporate tax
Corporate tax | Commentary

D2.719 Calculation of DPT

Corporate tax | Commentary

D2.719 Calculation of DPT

There are three ways in which taxable diverted profits (if any) may be determined. The first key step before establishing which method applies is to establish the 'actual provision condition'. This condition is met if the material provision (ie the actual transaction(s)) results in expenses that would (ignoring any transfer pricing disallowance) be allowable in computing the notional PE profits for the accounting period and a 'relevant alternative provision' also results in allowable expenses of the same type but would not have resulted in 'relevant taxable income' of a connected company1. For accounting periods beginning on or after 29 October 2018, a reference to a transfer pricing adjustment for these purposes also includes an adjustment under any other enactment if but for that enactment an adjustment would have been required under the

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