Taxes Consolidation Act 1997 section 697D

Election for tonnage tax

Section 697D sets out the requirements for electing into the tonnage tax regime, including the distinction between company elections and group elections.

• A qualifying company must make a tonnage tax election to use the tonnage tax method of calculating profits for corporation tax purposes; a single company makes a "company election" and a group makes a "group election".
• Where a company is a member of a group, it can only come within tonnage tax if all qualifying companies in the group join in a single group election, which then applies to every qualifying company in the group.
• A tonnage tax election is only valid if the requirements of section 697F are met, meaning the election must not be part of a tax avoidance scheme.
• The detailed rules for making and giving effect to a tonnage tax election are contained in Part 1 of Schedule 18B, which supplements the rules in this Part.