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Credit for foreign tax.
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41.— (1) Section 71 of the Principal Act is amended by inserting the following after subsection (3):
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“(3A) (a) In this subsection ‘foreign tax’ means a tax chargeable and payable under the law of a territory other than the State which corresponds to income tax or corporation tax.
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(b) Where income arising outside the State is chargeable to tax under Case III of Schedule D and a payment is made under the law of a territory other than the State to the person in receipt of the income by reference to foreign tax paid by another person, then the amount of income so chargeable shall be increased by an amount equal to the amount of the payment.”.
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(2) Schedule 24 to the Principal Act is amended in paragraph 9A—
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(a) in subparagraph (3) by substituting “subparagraphs (3B) and (5)” for “subparagraph (5)”,
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(b) by inserting the following after subparagraph (3A):
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“(3B) Where a payment is made under the law of a territory other than the State to any person by reference to tax paid under the law of a territory other than the State in relation to a relevant dividend paid by a company, then the amount of the credit to be allowed under subparagraph (3) against corporation tax attributable to the profits represented by the dividend shall be reduced by an amount equal to the amount of the payment.”,
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and
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(c) in subparagraph (4) by substituting “subparagraphs (3) and (3B)” for “subparagraph (3)”.
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(3) This section applies to income and dividends received on or after 4 February 2010.
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