INTM489845 - Diverted Profits Tax: customer engagement with HMRC: informal engagement about Diverted Profits Tax

Engagement between a customer and HMRC on DPT is likely to arise as a result of the following:

• a company notifies HMRC of its potential liability to DPT, or
• DPT is identified as a potential risk as a result of risk assessment work (this may be due to work done by DPT specialists, case workers or international tax specialists), or
• a customer contacts HMRC to seek greater certainty on the application of DPT to their particular arrangements.

Although the first two situations may lead to informal engagement between HMRC and the customer, it is in the third situation that most of the informal engagement is likely to take place.

LB case workers and CCMs may have an initial discussion with customers about their cross-border transactions in order to understand the customer’s position on the potential application of DPT.

For MSB customers, any discussion on DPT should be carried out by MSB Diverted Profits Technical Co-ordinators.

However, unless they are confident that the transactions discussed do not present a risk for DPT, HMRC officers should not comment on the potential application of the DPT rules in any particular case until they have consulted the LB international Tax Specialist, or MSB Diverted Profits Technical Co-ordinator.