Section 911 — Income Tax Act 2007: Double taxation arrangements: deduction at treaty rate

Double taxation arrangements: deduction at treaty rate 911 1 This section applies if—

a a company pays a royalty from which it is required to deduct a sum representing income tax under Chapter 6 or 7, b the income tax in respect of the payment is collectible under Chapter 15 or 16, and c the company reasonably believes that, at the time the payment is made, the payee is entitled to relief in respect of the payment under double taxation arrangements.

2 The company may calculate the sum to be deducted from the payment under Chapter 6 or 7 by reference to the treaty rate.

3 But, if the payee is not at the time entitled to such relief, this Part has effect as if subsection (2) had never applied in relation to the payment.

4 In this section “ the treaty rate ” means the rate of income tax appropriate to the payee under the arrangements.