188体育

TIOPA10/S59 (8) provides that 鈥榬elevant profits鈥� or 鈥榩rofits available for distribution鈥� are the company鈥檚 accounts鈥� profits making no provision for reserves, bad debts or contingencies other than such as is required to be made under the foreign country鈥檚 law.

In practice, transfers to reserves for a future liability are allowed if they represent a proper deduction in computing commercial profits and there is a firm expectation that the liability will be incurred and they are directly related to the expected amount of the liability. Provisions which represent an appropriation of profit or which are made not on grounds of commercial necessity but for reasons of commercial prudence are regarded as available for distribution and included in relevant profits.

CTIAA Underlying Tax Group has considered a number of reserves commonly found in particular countries. Their proper treatment is shown in the Group鈥檚 information leaflets, which are sent to companies when considering a dividend.