The following Corporation Tax guidance note Produced by Tolley in association with Anne Fairpo provides comprehensive and up to date tax information covering:
An international group’s effective rate of tax is usually calculated as the amount of tax it pays divided by its consolidated profits. The effective tax rate depends largely on:
the rate of tax paid by each company in the group
the companies in which profits are recognised
See Example 1.
The objective of effective tax rate planning is usually to ensure the profits are recognised in companies which pay tax at a low rate rather than a high rate.
However, other taxes may arise as a result of:
withholding taxes on trading and other income ― see the Foreign trading income guidance note
controlled foreign company (CFC) and other anti-avoidance rules ― see the Controlled foreign companies (CFCs) and Shareholder tax issues guidance notes
withholding taxes on div
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