Income Tax Act 2007 section 980

Derivative contracts: exception from duties to deduct

Section 980 provides an exemption from the normal obligation to deduct income tax at source when a company makes payments under certain derivative contracts.

• Companies are not required to deduct income tax from payments made under qualifying derivative contracts, despite the general rules in this part of the Act.
• The exemption applies specifically to derivative contracts whose profits and losses are calculated under Part 7 of the Corporation Tax Act 2009.
• This covers derivative contracts that a company has either entered into or acquired, where the corporation tax calculation rules apply.
• The exemption overrides any other provisions in this part of the Act that would otherwise require tax to be deducted at source.