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Fortnight to 23 August 2018

Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.

Supreme Court decision in Prudential test case – taxation of portfolio dividends
As reported in our 26 July edition, the UK Supreme Court issued the decision on the CFC & Dividend Group Litigation case led by Prudential on the 25th July 2018. This newsalert considers the implications of the judgement, particularly for investment funds and life companies.

Permanent Establishment - Services PE developments
Managing Permanent Establishment risks has always been a challenge for tax departments of large Multinational Corporations. The risks are often largely dependent on the activities and travel patterns of many hundreds or thousands of staff, and keeping track of individuals’ movements and activities is often very difficult.  Our specialists discuss those risks and, in particular, developments relating to the concept of a ‘Services PE’.

IFRS 16 - Draft Finance Bill proposals
The draft finance bill clauses published on 6 July 2018 include measures relating to the taxation of leases for accounting periods beginning on or after 1 January 2019. Despite the Government’s intention that the proposed legislative changes would ensure that the leasing rules continue to work as originally intended, the draft legislation will (if enacted in its current form) have a significant impact on the ‘status quo’ and place a heavy compliance burden on lessees, particularly on transition.