Double Taxation Relief: equivalent foreign levy
Paragraphs 66(1)(a) and (2) of Schedule 19
The legislation at paragraph 66(1)(a) refers to double taxation relief being afforded in respect of any ‘ equivalent foreign levy’. Sub-paragraph 66(2) then explains that this means any tax imposed by the law of a foreign territory that corresponds to the bank levy.
To correspond to the UK bank levy and to be treated as an equivalent foreign levy the foreign levy must:
- broadly follow the proposals for the design of bank levies as set out by the IMF in their paper ‘A fair and substantial contribution by the financial sector’ (PDF 485KB) () published in June 2010, and
- be a levy based upon the balance sheet (on either assets or liabilities) and must be similar in intent to the UK bank levy
- it will not be an equivalent foreign levy if it is a tax on income, profits or gains.