HYBRID MISMATCH RULES PRIORITISE NATIONAL OVER PROVINCIAL TAX

摘要

HMRC will consider national taxes in other jurisdictions the closest to UK equivalents over provincial levies, guidance released on hybrid mismatches shows. The HMRC guidance, published on 31 March, on the application of hybrid mismatch legislation outlines several examples of the intended function of the rules. The legislation, which came into effect on 1 January 2017, despite the tardiness of the guidance, aims to neutralise the tax mismatch created from hybrid financial instruments and hybrid entities, and from arrangements involving permanent establishments of these arrangements by altering the tax treatment of either the deduction, or the receipt, depending on the circumstances.