Advanced Thin Capitalisation Agreements

HMRC is strongly in favour of negotiating bilateral or multilateral agreements ahead of price, unless the experience we have gained so far indicates that HMRC is very “open to business” for low-cap advance applications and has been particularly useful for companies and shareholders fighting against FIN 48 receivables and the provision of tax, and for those seeking more clarity on invoice tax payments, as well as for those who want to avoid significant resources being involved in complex and time-consuming HMRC requests for their intragroup financing agreements. Are pre-price agreements with tax authorities possible in your jurisdiction? If so, what form do they generally take (for example. B, unilaterally, bilaterally or multilaterally) and what companies and transactions can they cover? Unlike many tax authorities around the world, HM Revenue-Customs (HMRC) does not operate a separate thin-cap regime. Rather, it is based on the general transfer pricing provisions of Part 4 of the 2010 taxes (international and other provisions). While many thin-cap interest deductibility schemes (i.e. the granting of interest deduction up to a pre-defined limit) practice safe formulas and ports, the British regime is based exclusively on the principle of arm length, which is in fact an audit of whether a company would have borrowed the same amount from an independent party without the support of the parental or cross-use guarantee. The negotiation period usually depends on the complexity of the case. Simple cases can sometimes be resolved through emails, letters and appeals, while more complex agreements may require a series of meetings before reaching an agreement. Both HMRC and the taxpayer have the right to be concerned about the ATCA process if one of the parties feels that it is not possible to reach an agreement. In this case, the thin-cap question will go back to an annual self-assessment. Meeting the requirements of the UK Thin Layer Regime is a complex challenge and the introduction of the ATCA programme was an important step in creating a framework to eliminate much of this uncertainty. The following pre-price agreements apply and apply: pre-price agreements generally have a maximum term of five years. Bilateral and multilateral, bilateral and multilateral pre-price agreements, as well as small-cap advance agreements, are available.

The British regime is considered one of the most complex of the thin-film schemes developed, which leads to greater uncertainty for British taxpayers. In the past, this uncertainty has been exacerbated by delays in the UK`s corporate tax self-assessment scheme (CTSA), which generally allows for an investigation window of up to 12 months after the presentation of the corresponding CTSA refund. In practice, this has resulted in companies that have been looking at loan financing applications for several years and have faced low ceilings. According to the latest HMRC statistics, the average time to complete an advance price agreement is about 33 months. However, the time required can vary considerably depending on the parties involved and the purpose of the pre-price agreement. Since 2007, APP legislation has allowed small-cap projects (ATCs) to be closed (see 774-895). It should be noted, however, that although the ATCs and AMAs are based on the same legal provisions, there are separate procedures to ensure agreement. Hmrc guidelines for entry into an ATCA are included in the SP1/2012 Practice Statement (which has largely replaced SP4/2007 to update legislative references).