08 June 2016 New UK anti-hybrid rules fundamentally change taxation of banks and insurers operating through a branch network For many commercial, regulatory and operational reasons, banks and insurers commonly operate internationally through branches. Under the anti-hybrid legislation contained in Finance Bill 2016, UK banks and insurers with branches and those trading in the UK through branches may now encounter a restriction on deductions or imputation of taxable income on entirely normal trading situations. This represents a radical change to the rules for the UK taxation of inbound and outbound branches — a significant change which has not been subject to consultation and also which does not have any basis in the Organisation for Economic Co-operation and Development (OECD) Final Report on Action 2 (hybrid mismatches) of the Base Erosion and Profit Shifting (BEPS) project. Document ID: 2016-0993 |
