Sophie Donnithorne-Tait, Serena Lee Article on Changes to UK “Controlled Foreign Companies” Rules Published by Tax Journal
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“Have changes to the UK’s CFC rules created thousands of ‘surprise’ CFCs?,” an article by Akin Gump tax partner Sophie Donnithorne-Tait and counsel Serena Lee, has been published by Tax Journal.
The article discusses the amendment to the controlled foreign companies (CFC) “control” test, which took effect at the start of 2019; its policy aim: bringing U.K. rules into compliance with the EU Anti-Tax Avoidance Directive (ATAD).
The authors note that the amendment appeared to go much further than required by ATAD, and that, as they write, “many more companies fall within the definition of a CFC than would have fallen within the pre January 2019 UK rules combined with the basic ATAD ‘control’ rules – a potentially unpalatable and unexpected outcome for taxpayers, advisers and compliance firms alike.”
The article covers the policy background to the measure and the breadth of the UK implementing rules.
To read the full article, please click here.
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