Hybrid Mismatch Rules

2 Part Course | This course covers the principles of hybrid rules as outlined in BEPS recommendation 2

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A one-day course presented over two-half days in a virtual class from 9:30am to 1:00pm UK time

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Download: Course Category Brochure | Course Outline

Part One

Hybrid payers – This looks at dual resident companies as well as the permanent establishment of foreign branches
Hybrid payees – recipients of payments which may have inconsistent tax treatment across borders
Hybrid instruments – Identifying instruments which have different tax treatments in different jurisdictions
Introductory examples of potential mismatches

Deduction/non-inclusion (D/NI) mismatches
Double deduction (DD) mismatches
Primary and secondary responses to mismatches – how the mismatch is counteracted
Interaction with other tax law
Key terms and definitions used in the law

Tax, payment, quasi-payment, payer, payee, ordinary income

Hybrid entities – definition and examples
Control groups and related persons and their importance in the conditions for the hybrid legislation to apply
Financial instruments (D/NI) mismatches – conditions, counteractions and examples
Hybrid transfers (D/NI mismatch) – conditions, counteractions and examples

Examples Used

Generic D/NI mismatch
Generic DD mismatch
Hybrid financial instruments (D/NI mismatches)
Generic hybrid transfers mismatch
Zero-coupon convertible loan note
Undertaxed income

Part Two

Third-party transactions – how the legislation deals with transactions routed through different jurisdictions and the effect of the imported mismatch rules
Interaction with other tax legislation – There are other elements such as the transfer pricing and unallowable purpose rules which would seem to overlap with the hybrid rules:
- How the interactions work
Hybrid payer (D/NI) mismatch – conditions, counteractions and examples

Hybrid payee (D/NI) mismatch – conditions, counteractions and examples
UK permanent establishments of multinational entities (D/NI mismatches) –
conditions, counteractions and examples
Hybrid entity DD mismatches – conditions, counteractions and examples
Dual inclusion income in DD mismatched

Examples Used

Imported mismatch – hybrid financial instruments issued and invested in outside of the UK
Transfers by a UK branch of a multinational parent
Real case study scenario to analyse and conclude on

Our Hybrid Mismatch Rules trainer is a UK Chartered Accountant and Chartered Tax Advisor winning the John Wood Medal in the November 1995 CIOT sitting for the best paper on business taxation.

He was previously Director of Finance and Taxation Programmes at BPP Professional Education and has delivered IFRS, US GAAP, UK Tax and VAT to a multitude of organisations worldwide since 1992.

He has particular experience as a hybrid financial advisor in bespoke IFRS and US GAAP training programmes to multinationals in the financial services, transport and energy sectors as well as delivering UK tax and VAT update programmes to accounting and law firms.

The hybrid mismatch rules course trainer is passionate about training and his enthusiasm ensures that the participants enjoy the learning experience whilst gaining knowledge through their engagement in the sessions and through encouraging them to ask questions and discuss practical issues they may have.

He also provides consultancy services to companies and accounting firms, including the provision of tax and VAT advice, reviewing accounting policy manuals and advising on accounting treatments of various transactions.

Understand the source of the hybrid mismatch arrangements rules and different chapters of the UK hybrid legislation.
Understand what a hybrid mismatch is and when it can arise.
Distinguish the different types of mismatch to ensure the correct conditions are used to identify if there is a potential mismatch that may need counteracting.
Understand when a mismatch does not arise.
Calculate adjustments arising out of a mismatch.
Understand the changes in the Finance Act 2021 and how they relate to the original hybrid legislation.

The course is highly practical and will include multiple examples to assist with understanding the rules.
It is presented by an independent training professional and can be a completely independent look at the issues raised.
The course will encourage participation and allow for all questions and clarifications to be considered.
The course will always be completely current and relevant.

Our hybrid mismatch rules course is a ‘must know’ for:

Tax professionals involved in the preparation or review of UK hybrid corporation tax computations of multinational companies. Especially but not exclusively where a UK company has a US parent or a US major corporate hybrid investor, or where the UK entity is a branch of a multinational company or group.

The course is a ‘nice to know’ for:

CFOs, FDs and FCs to understand the possible tax adjustments that may be necessary for a UK subsidiary of a foreign parent (especially a US parent) or a UK branch of a multinational group.

This two-part hybrid mismatch rules course is designed to help attendees understand when UK companies and branches might face a disallowance under the mismatch anti-hybrid rules.

It will guide delegates through the process of identifying the different types of mismatch that can arise and the conditions that need to be met for counteraction to be considered, as well as how the mismatch is actually counteracted, if at all.

Delegates will learn through multiple examples how to identify potential mismatches and exactly what type of mismatch it is, which is vital as the conditions for potential counteraction are different in each case.

They will have an opportunity to assess their knowledge by analysing a real-life hybrid scenario where advice was sought from the trainer.

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(min. 50 participants)