In the 2015 Budget, George Osborne confirmed that legislation will be introduced in the Finance Bill 2015 for a new tax on diverted profits coming into effect from 1 April 2015.

The tax was first announced at the Autumn Statement 2014 and in his speech the Chancellor of the Exchequer stated that it is aimed at “large multinationals who artificially shift their profits offshore”. Following consultation, the legislation has been revised to narrow the notification requirement.

There have also been changes to clarify rules for giving credit for tax paid, the operation of the conditions under which a charge can arise, specific exclusions and the application of the Diverted Profits Tax to companies subject to the oil and gas regime.