IEIM570900 - What and how to exchange: Template for exchange of tax rulings

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Guidance for completing the template

Please note that ALL the fields in the template are mandatory to complete except Section 1A and Section 6.

Section 1A - Ruling reference number (if available).

Section 1B - Recipient jurisdiction

Please provide the names of the countries of residence of the affected entities from Section 9. The Rulings Team within JITSIC need to know which jurisdiction(s) are interested in the clearance information. This will usually be the jurisdiction at the “other end” of the cross-border transaction or impacted by it but could be because of a resident company being an immediate or ultimate parent company. See section 8 for more details.

Section 2 - UK Taxpayer Details

This should include all the information necessary to identify the UK taxpayer and determine its association with a multinational enterprise (MNE) group. The following fields are required:

  • taxpayer identification number (TIN) or other tax reference number
  • legal name of the entity (i.e. name of the taxpayer) and address. Within the address field only the “street”, “post code”, “city” and “country” where the taxpayer is registered are mandatory fields.

Note that in cases of a foreign company with UK Permanent Establishment, input the UK PE address in this field.

Section 3 – Date of issuance

Please provide the date when the clearance was given.

Section 4 - Validity of the ruling/period covered by the ruling

This should show the accounting periods/tax years covered by the ruling. The ‘To’ field can be left blank only if the ruling is open ended.

Section 5 - Type of ruling issued

Please tick the appropriate box in the template as this identifies the type of ruling that needs to be exchanged. All relevant boxes should be ticked so if a ruling combines several different elements, for instance, a unilateral advance pricing arrangement (APA) and an agreement on the tax treatment of a permanent establishment (PE), then both boxes should be ticked.

Section 6 - Additional information regarding the ruling and the taxpayer

This additional information is optional but may better inform/assist tax administrations.

Transaction Amount, if any - Where the clearance relates to a specific transaction and you know the value, please include the value of the transaction. Where the transaction relates to a loan put the value of the amount covered by the clearance, (i.e. for an ATCA the amount of the connected party debt covered by the clearance).

Entity’s annual turnover - Enter the volume of business of an enterprise as contained in the profits and loss account.

Accounting Profit: Use the profit before tax per the accounts and not the taxable profit figure.

Section 7 - Summary of the Ruling

It is important that sufficient information is provided to make the ruling exchange useful to our treaty partners in line with the

FileOECD guidance

Remember the information will be used by people unfamiliar with UK legislation.

This should provide a short summary of the issue covered in the ruling with a description of the transaction or activity covered by the ruling and any other information that could help the receiving tax administration risk-assess the potential base erosion and profit shifting (BEPS) risks posed by the ruling. For example, in the case of a unilateral APA the summary could set out the type of transaction or income covered, and the transfer pricing methodology agreed. The summary is intended to be high-level so should not generally include details of specific provisions in a country’s tax code.

It is important that enough information is provided here to make the exchange of the information useful in line with OECD guidance.

Please provide/state

  • a short summary of the issue(s) covered in the ruling and include a description of the business activities or transactions covered by the ruling in abstract terms, without leading to the disclosure of a commercial, industrial or professional secret, and the key conclusions reached in issuing the ruling. For example, in the case of a unilateral APA the summary could set out the type of transaction or income covered, and the transfer pricing methodology agreed.

  • why the country/countries are likely to be impacted by (or interested in) the ruling from a tax risk assessment perspective

  • why the country/countries have been identified

  • any other information that could help the receiving tax administration risk-assess the potential tax risks posed by the ruling.

The length of the summary may vary depending on the complexity of the arrangement. The summary should generally not include legislative references unless they further clarify or articulate the summary.

For example -

  • The UK has a Controlled Foreign Companies regime where companies that are resident outside of but controlled from the UK make profits that have been diverted from the UK then an appropriate charge is made on the first UK resident holding company.

  • A UK group with a subsidiary in Utopia applied for a ruling and HMRC agreed that the profits made by the Utopian company had not been diverted from the UK and so a Controlled Foreign Company charge did not arise to the UK group.

Please bear in mind the information here will be used by people unfamiliar with UK legislation.

Section 8 - Reason for Exchange with the recipient jurisdiction

This will inform the recipient jurisdiction why it is receiving the ruling. Please tick the relevant box(es) that apply.

Section 9 - Details of the entities in the recipient jurisdiction

This should provide further information on any entity or entities to which the ruling relates and that are resident in the recipient jurisdiction. The name of the entity and the address are mandatory, and the TIN or other tax reference number should be provided where such information is available.

The Rulings Team within JITSIC need to know which jurisdiction(s) are interested in the clearance information. This will usually be the jurisdiction at the “other end” of the cross-border transaction or impacted by it. However, under OECD rules we are also required to inform the jurisdiction(s) where the immediate and ultimate parent companies are resident (see section 8 above) so please list the relevant entities with their addresses in this Section.