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HMRC internal manual

International Exchange of Information Manual

HM Revenue & Customs
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Action 5 rulings: Example of exchange of a ruling

IEIM541500: Action 5 rulings: Example of exchange of a ruling

HMRC agrees a unilateral APA with Company N, resident in the UK, concerning the pricing of a transaction with an affiliate, in Guatemala.  The ultimate parent of Company N is in Cayman, and its immediate parent is in the Netherlands.  The following exchanges should be considered:


Here the only other party to the transactions covered by the APA is resident in Guatemala.  Guatemala has not committed to implement the transparency framework, (see IEIM540300), so would not receive an automatic exchange in line with Action 5.

There is no legal gateway to exchange information between the UK and Guatemala (as at May 2016), and so there is also no spontaneous exchange of the ruling with that jurisdiction (IEIM530010).


The residence country of the ultimate parent company

Cayman has not committed to implement the transparency framework at Action 5, (see IEIM540300), so HMRC would not exchange the unilateral APA.

There is an exchange agreement between the UK and Cayman, but as Cayman does not have a tax on profits of corporations the ruling is not foreseeably relevant to Cayman.  No spontaneous exchange is made (IEIM530010).


The residence country of the immediate parent company

There is an exchange instrument between the UK and the Netherlands, as well as the EU Directive on Administrative Cooperation.  The Netherlands is a member of OECD, and committed to spontaneous exchanges of rulings giving rise to base erosion and profit shifting concerns.

HMRC will exchange details of this unilateral APA with the Netherlands under the UK/Netherlands Double Taxation Treaty and the DAC (IEIM550300).

If you are unsure of which countries have participated in the transparency framework or which have an exchange instrument with the UK, you should email JITSIC, or simply list all the potential jurisdictions you believe to be involved in the template at IEIM570800.