Diverted Profits Tax: Mutual Agreement Procedure (MAP) decisions

The measure

The government announced that legislation will be introduced to make Diverted Profits Tax (DPT) one of the taxes in respect of which a Mutual Agreement Procedure (MAP) outcome can potentially be implemented in the UK. 


Who will be affected?

Companies who are subject to DPT, where there is consequently potential double taxation and where relief may thus be sought by the taxpayer under a relevant double tax treaty.


When will the measure come into effect?

The government will legislate in Finance Bill 2021-22 and the measure will be effective for any MAP decisions involving DPT reached after 27 October 2021.

Our view

This measure, if enacted, should provide companies with the ability to potentially obtain double tax relief in relation to a DPT charge (in implementing a MAP outcome).  This will be welcomed by such taxpayers in principle, although the detailed legislation will need to be reviewed when available.