We now turn to recent developments concerning diverted profits tax (DPT). Apart from HMRC’s updated DPT guidance (see part 1 of this series), these developments can be placed under three headings:

(1) UK implementation generally of OECD Base Erosion and Profit Shifting (BEPS) developments relevant to DPT;

(2) Finance Act 2019 (FA 2019) changes to the DPT rules themselves; and

(3) the new profit diversion compliance facility.

UK implementation of BEPS developments relevant to DPT

The UK has been an early adopter of measures responding to the issues addressed by the BEPS project. This changing – expanding – scope and extent of the UK’s main corporation tax regime has an obvious interaction with the scope of the DPT.

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