Diverted Profits Tax. Key points

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1 Diverted Profits Tax Given the publicity surrounding the practices of multinationals in particular a number of the large US technology corporations - in structuring their affairs to minimise their tax liabilities, it is not completely surprising that the UK Government has chosen to act in an election year by introducing a new tax, called the Diverted Profits Tax ( DPT ). The DPT is intended to deter and counteract the diversion of profits from the UK by large multinational groups and will apply at the rate of 25% (rather than the corporation tax rate of 20%). The legislation enacting the DPT has been rushed through the parliamentary process and the new tax is applicable to diverted profits arising on or after 1 April 2015 (with apportionment rules where the accounting period straddles that date). HMRC has also issued Interim Guidance regarding the application of the rules. There is no grandfathering of existing structures so all existing arrangements can be within the scope of the new tax. For some commentators, the timing for the introduction of this new tax is questionable, given that it represents unilateral action by the UK Government at a time when the Base Erosion and Profit Shifting ( BEPS ) project is well underway and due to complete its recommendations by the end of One of the key messages of the BEPS project is that countries should work collectively to reform international rules, rather than adopt unilateral measures which could undermine the BEPS project. It is, therefore, disappointing that the UK Government has effectively jumped the gun and has introduced a new tax which introduces potentially onerous burdens on large multinational enterprises, and which involves a pay now argue later approach giving extensive discretion to HMRC as to the amount of tax applicable to its assessment of an enterprise s diverted profits. The DPT is intended to apply to two broad situations: where a foreign company structures its arrangements to avoid creating a UK permanent establishment ( PE ) and, broadly, makes more than 10m annually in UK-related sales revenues from the supply of goods, services or other property and its UK-related expenses exceed 1m. UK-related sales of affiliated companies are also included in determining the application of the 10m threshold where such sales are not subject to UK corporation tax; and where entities or transactions (involving affiliated parties) lack economic substance and either involve a UK resident company or a UK PE of a foreign company to exploit tax mismatches where it is reasonable to assume that expenditure in the UK would not have been incurred, or taxable UK income would have arisen, but for the tax benefit of the actual arrangements. Broadly, profits which are chargeable to UK taxes are generally subject to usual transfer pricing rules (where such adjustments are taken into account in the company s tax return), with the diverted profits tax intended to apply particularly in those cases where the transfer pricing adjustment is insufficient or there is a recharacterisation of the arrangements and the tax is applicable to diverted profits determined on a just and reasonable basis. The rules are intended to apply only to large enterprises and not to small or medium sized enterprises ( SME ) in any accounting period. SMEs broadly comprise enterprises employing globally fewer than 250 persons and which globally have an annual turnover not exceeding 50m and/or annual balance sheet not exceeding 43m. The rules are not limited to transactions or arrangements with tax haven or low-tax jurisdictions, but can apply more broadly. Larger multinational enterprises will need to consider the impact of these proposed new rules particularly if they are generating (or are looking to generate) significant revenues from UK activities as these new rules could influence how they structure their activities in the UK. Moreover, these rules should also be considered if multinational enterprises are looking to develop UK property or lease property to UK affiliates. Key points > > New penal rate of tax of 25% could apply to large multinational enterprises from 1 April 2015 who carry on activities in the UK through an avoided PE but without paying UK tax on trading profits from those activities > > The new tax can apply to large multinational groups that structure their arrangements to divert profits from the UK where there is a lack of economic substance in the lower tax foreign jurisdiction where the arrangements would otherwise have given rise to taxable activities in the UK > > Diverted profits tax can apply to UK property development activities and to excess rental payments to foreign affiliates > > Notification requirements to HMRC are imposed on large companies within a short period after the end of the accounting period > > Pay now argue later approach to tax

2 Whilst there are likely to be valid arguments challenging the validity of this new legislation under existing EU law principles and arguing its impact is limited by existing double tax treaty provisions, the short timeframe for providing notification to HMRC of the application of the DPT and the need to pay the tax well in advance of any challenge to the law s validity, will expose larger multinational enterprises with significant UK activities to the possibility of having to notify HMRC of the possible application of the diverted profits tax. Click here to view the legislation and interim guidance Avoidance of a UK PE by a foreign company Broadly, this rule is intended to apply where (i) a foreign company which carries on a trade involving supplies of goods, services or other property, (ii) another person (the avoided PE ) is carrying on activity in the UK in connection with the foreign company s supplies and (iii) arrangements are entered into which effectively separate the substance of its UK activities from where the business is formally done with a view to ensuring that the foreign company avoids the creation of a UK PE and thereby avoids UK taxation on those activities. The legislation is aimed at, but not limited to, situations where significant sales activities take place in the UK but fall short of the conclusion of contracts in the UK. However, the DPT will not apply to situations where either: the activities in the UK are undertaken by a UK agent of independent status (who is not connected with the foreign company or, even if connected, is an independent broker, investment manager or Lloyds agent); or the foreign company s UK-related sales revenue (together with all connected companies UK related sales revenues which are not subject to UK corporation tax) from all supplies of goods, services or other property (which broadly arise from a UK activity) in a 12 month accounting period do not exceed 10m; or the foreign company s (and all connected companies ) total UK-related expenses relating to the UK activity in a 12 month period do not exceed 1m. These expenses must relate to activities carried on in the UK in connection with supplies made by the foreign company in the course of its trade. For these purposes, HMRC considers revenues and expenses to be determined in the manner recognised in the company s GAAP compliant accounts. The rule will apply where it is: reasonable to assume that any activity of the avoided PE or foreign company (or both) is designed to ensure that the foreign company does not carry on the trade in the UK (for corporation tax purposes) through a PE by reason of the avoided PE s activity. It does not matter whether it is designed to secure any commercial or other objective; and either of the following conditions is met: broadly a payment or transaction (other than transactions only involving loans or hedging derivatives of such loans) arises between the foreign company and a related person (such as the avoided PE), there is an effective tax mismatch between the foreign company and that person and the insufficient economic substance test is met (see Entities or transactions lacking economic substance below for further detail); or in connection with supplies of goods or services or other property, arrangements are in place, one of the main purposes of which is to avoid or reduce a charge to UK tax. The main purpose test would be met where (for example) the arrangement would not have been carried out at all were it not for the anticipated tax advantage or any non-tax objective was secondary to the benefit of the tax advantage.

3 Avoidance of a UK PE calculation of the charge The taxable diverted profit is generally determined as the amount that would be the chargeable profits had the avoided PE been an actual UK PE through which the foreign company carried on the trade in the UK (i.e. the notional PE profit ). However, if the effective tax mismatch condition (see Entities or transactions lacking economic substance below) is satisfied and it is reasonable to assume that a relevant alternative provision would have been made between the foreign company and companies connected with it had tax (including any non-uk tax) on income not been a relevant consideration for any person at any time (i.e. there would have been a recharacterised arrangement), then an alternative basis of calculating the charge will arise where the alternative arrangement would not have resulted in the same type of allowable expenses in the UK and/or would have resulted in taxable UK income of a connected company. In this case, in calculating the chargeable profits of the avoided PE, the taxable amount for DPT will be based on: if the recharacterised transaction would have resulted in UK taxable income to a connected company, the notional PE profits that would have been taxable if the foreign company had a UK PE in that accounting period together with any UK taxable income which would have arisen to a connected company; and otherwise, the notional PE profits under the recharacterised (rather than actual) arrangements plus UK taxable income that would have arisen under the recharacterised arrangements. Avoidance of a UK PE who will this apply to? The rule is generally intended to apply where there is a foreign company that, with another person (such as an agent, representative office, back office subsidiary) whether UK resident or not ( the avoided PE ), carries on an activity in the UK in connection with supplies of goods, services or other property by the foreign company as part of its trade. It is designed to encompass situations where, for instance, a multinational technology company makes supplies of software or downloads to UK customers without creating an office or other taxable PE in the UK in respect of its trading activities conducted through a foreign entity based in a low tax jurisdiction which has only a small number of staff. Often activities in the UK are limited to the provision of technical, sales and other support for the foreign company through a representative office or subsidiary which has no authority to conclude contracts so that it only gives rise to a relatively low taxable profit margin in the UK. In general, the amount of taxable profits charged to DPT will be equal to the notional profits that would have been charged to the foreign company if there had been a UK PE. The ambit of the rule is so wide that any overseas company within a large group with UK activities (whether involving sales to UK or non-uk customers) which generate more than 10m of revenues and incur more than 1m of expenses will need to consider the application of these rules in determining whether it is required to make a notification to HMRC. It is anticipated that the alternative provision calculation for the DPT charge would apply where a foreign company pays a tax deductible royalty for an IP asset used by the avoided PE in the UK (for instance, in respect of online services) and where the IP is held by a group company in a low tax territory. It is necessary to consider in this case what the chargeable profits of the foreign company paying the royalty to the IP holding company would be if it had been carrying on the trade (such as the supply of online services) through the avoided UK PE and what the appropriate deduction for the royalty payment would be in calculating the DPT. If a royalty would have been payable by the foreign company (just to an IP group holding company in a higher tax jurisdiction, for instance), then profits of the avoided PE would be determined based on the notional profits of the UK PE (taking into account any available tax relief for the royalty payment) but also including in the calculation any UK taxable income which would have arisen to a connected company from the royalty under the recharacterised arrangement. This alternative provision calculation, in particular, provides extensive discretion to HMRC to seek to recharacterise the actual arrangements between group companies in calculating the relevant DPT.

4 Entities or transactions lacking economic substance This basis for the application of the charge arises where there is a UK resident company (or, extending to, a UK permanent establishment of a foreign company) and there are transactions between such UK entity and a related person (whether foreign or otherwise) that give rise to an effective tax mismatch outcome between these entities and the insufficient economic substance condition is also met. In determining whether: an effective tax mismatch arises from a particular payment or transaction, it is broadly necessary to compare the extent to which the reduction in the UK tax liability is greater than the corresponding increase in the foreign company s total liability to corporation tax, income tax or any non- UK tax (including any withholding taxes), ignoring the availability of any loss reliefs to the foreign company. The legislation makes clear that mismatches arising solely from loan relationships (or associated hedging transactions) and mismatches from payments to pension funds, charities and other specified exempt bodies are exempted from the provisions. If, in effect, the foreign company s additional liability to tax is less than 80% of the UK tax reduction by reason of the arrangements, then there will be an effective tax mismatch (i.e. the relevant tax reduction must be substantial); and the insufficient economic substance test is met, it is necessary to consider whether the financial benefit of the tax reduction (including any reduction, elimination or delay in paying any tax, including any non-uk tax) exceeds the non-tax financial benefits of the transaction and whether it is reasonable to assume that either: the transaction was designed to secure the tax reduction; or the entity s involvement in the transaction was designed to secure the tax reduction unless: it is reasonable to assume that the non-tax benefits referable to the contribution made to the transaction or series of transactions by that person (in terms of the functions or activities that that person s staff perform) would exceed the financial benefit of the tax reduction (looking at all the accounting periods); and/or in respect of the specific accounting period, the greater part of the income attributable to the transaction is attributable to the ongoing functions or activities of that person s staff. The question here is what is the economic value of the transaction for both parties and is this greater than the tax reduction. In considering this test, it is necessary to ignore the functions or activities relating to the holding, maintaining or protecting of any asset from which income attributable to the transaction is derived. The purpose of this test is to ensure that the DPT legislation does not apply purely because a company decides to take advantage of lower tax rates in another territory by means of a wholesale transfer of the economic activity which generates the income, although this will not apply where the only activity transferred relates to holding, maintaining or legally protecting the assets which give rise to the income. Therefore, if the economic value of the functions or activities of the company s staff is less than the amount of tax which is reduced (after taking into account any additional tax liabilities arising from the transaction itself, such as exit taxes) and the transaction was designed to secure the tax reduction, this insufficient economic substance test will be met. HMRC have made clear in guidance that they will seek to apply the general anti-abuse rule ( GAAR ) and other anti-avoidance provisions to any contrived attempts to circumvent the DPT legislation. Such measures to try to circumvent the DPT could involve, for instance, arrangements aimed at avoiding a tax mismatch outcome through characterising payments as exempt.

5 Lack of economic substance calculation of the charge In this case, the legislation now clarifies that no taxable diverted profits will arise where any relevant alternative provision (i.e. the recharacterised arrangement) would have resulted in the same type of allowable expenses as the actual case and no UK taxable income would have arisen and either no diverted UK profits would arise or transfer pricing adjustments are made to fully take account of diverted profits. Hence, DPT does not apply if the actual transaction is either correctly priced or transfer pricing adjustments made in the company s tax return reflect the correct pricing. HMRC guidance provides an example of this situation as including a situation where a royalty is paid that would have been paid under a recharacterised transaction in any event (even if the amount would have differed or it was not payable to the same person). However, where there remain diverted profits in this situation or a full transfer pricing adjustment is not made, the taxable diverted profits will be the amount to which the company is chargeable to corporation tax under transfer pricing rules together with any profits attributable to an actual UK PE (after deducting transfer pricing and other adjustments which have been included in the company s tax return before the end of the review period for that return). Furthermore, if the relevant alternative provision (i.e. the recharacterised transaction if tax on income had not been a relevant consideration) would have otherwise resulted in taxable income in the UK to a company for the corresponding accounting period, the taxable diverted profits are calculated as amounts subject to transfer pricing or otherwise (but which have not been included in the company s tax return) plus the taxable UK income of a connected company which would have resulted from the alternative arrangement. In any other case, the taxable diverted profits will be the excess of the amount by which the company would have been chargeable to UK corporation tax had the recharacterised transaction been undertaken over the amounts which are actually chargeable in the corporation tax return of the company plus the taxable UK income of a connected company for the corresponding period under the recharacterised arrangement. Lack of economic substance who will this apply to? It appears that this rule has very wide application to transactions between UK resident and non-uk resident related entities within a large group and it is not limited to transactions with non-residents located in low tax or no tax jurisdictions. From the guidance, it is clear that the rule is intended to be capable of applying to situations where, for instance, a UK resident company pays for the use of intangible assets held by a related non-uk resident company in a low tax jurisdiction where the IP holding company undertakes no research and development activities and has insufficient staff and substance in that jurisdiction. In looking at whether the IP holding company has insufficient economic substance, HMRC will consider factors such as the use of the IP in the UK (as compared with use of the intangible asset in other parts of the world), whether there is a separation of ownership from the functions needed to properly manage the intangible asset (and the extent to which those functions are carried out in the UK), cost synergies from centralisation of the asset, extra taxes associated with transfer of the asset (such as exit taxes), tax reliefs that would have been available to a UK company (such as tax amortisation of the asset) and any cost-benefit analysis produced at the time of the transaction. The rules confirm that transfer pricing rules will take precedence over the DPT in cases where even under a recharacterised transaction a royalty (or other amount) would have been payable by the UK resident, perhaps to a related company in a high tax jurisdiction. Where a full transfer pricing adjustment is made (for instance, in respect of the deductible amount of a royalty payment to a related company) no DPT charge will arise unless HMRC and the relevant company reach an impasse as to the correct amount of the transfer pricing adjustment. In those cases, the guidance confirms that HMRC may issue a DPT charging notice resulting in a disallowance of that part of the royalty fee which has not been adjusted under transfer pricing rules (unless the transfer pricing adjustment is

6 corrected during the review period). In effect, it is likely to be more difficult for large groups potentially subject to the DPT to challenge HMRC s views of what constitutes arm s length pricing of a transaction. However, an alternative provision for charging the DPT would be applicable in situations where the recharacterised arrangement would also give rise to additional taxable UK income to the relevant company or additional taxable UK income to a connected company. HMRC s guidance confirms that in determining the appropriate recharacterised transaction, consideration is given to where the functions, particularly decision-making functions related to the design, acquisition, maintenance and exploitation of the asset, are carried out. The alternative provision is intended to apply, for instance, where a royalty is paid to a related entity in a low tax jurisdiction and, in the absence of the tax mismatch outcome, the IP assets would have been held by the UK company itself. In that case, no deduction would be available in respect of royalty payments for the purposes of calculating the DPT and, if the asset would have been held in the UK under the alternative provision, the income from the asset is added to the taxable diverted profits. The example given in the guidance anticipates that this assumption could be satisfied if the asset (such as the IP) was originally held by the UK resident (and then transferred to the non-uk resident). The guidance extends the application of the DPT to situations involving a lease of plant and machinery held by a non-resident and leased to a UK resident affiliate. Specific situations development property Given the changes made to the legislation to ensure that it applies to supplies of property, the DPT can apply to tax profits from trading in property which may have historically been sheltered from UK tax under certain double tax treaties (which do not treat UK development property in certain cases as giving rise to a UK permanent establishment). If the UK development activities are conducted on behalf of the foreign company by an unconnected independent agent, then DPT should not apply under the avoided PE situation. However, if the UK agent s decision making is constrained or the UK agent is connected with the foreign company, there is a significant risk that DPT could apply. Consideration should be given to whether there is a notification requirement in these cases. It is considered less likely that the DPT would apply to investment property because such property does not involve a foreign company undertaking a trade and the legislation is not aimed at chargeable gains but is concerned with diverted taxation on income. In addition, such structures should not result in an effective tax mismatch in terms of rental income (which would remain subject to UK income tax). However, foreign companies which lease properties to an associated company lessee should consider whether their arrangements fall within the DPT. HMRC guidance indicates that the DPT can apply to situations where rental payments by a UK resident related lessee are made to a non-uk resident entity in a low tax jurisdiction holding the freehold of the property, particularly where the group s historic pattern of holding freehold property has been through UK companies. In that case, the tax deduction may be denied for the rental payments in applying the DPT. Reliefs and interaction with other provisions DPT is stated to be a separate tax from income or corporation tax and payment of DPT is ignored for the purposes of calculating income tax or corporation tax. No deduction or relief is allowed in respect of DPT paid by the company and no amount of DPT paid by the company can be treated as a distribution. This may be the basis upon which the Government believes it can argue that the tax is not encompassed within existing bilateral treaties and, therefore, is not subject to the existing treaty rules which broadly restrict the right to tax foreign companies on UK sourced trading income unless the trade is carried on through a UK permanent establishment. Whether such an argument will be successful is another matter.

7 To avoid double taxation, a UK company will be allowed credit against payment of DPT for taxes (being corporation taxes or non-uk tax corresponding to corporation tax) that it pays and that are calculated by reference to profits being charged to DPT. Credit for that tax is available to the extent it is just and reasonable against either DPT of the company on the taxed profits or against taxed profits of another company subject to DPT where the taxable diverted profits are calculated by reference to amounts which also constitute all or part of the taxed profits of that company. The legislation has clarified that such credit as is just and reasonable is also available in respect of a CFC charge against a DPT liability where DPT profits are calculated by reference to amounts also constituting all or part of the CFC profits. The DPT may interact with Advance Pricing Agreements ( APA ) agreed by large groups with HMRC in relation to transfer pricing. DPT charges can arise irrespective of existing APAs agreed by HMRC with large groups. For new APAs, HMRC guidance confirms that these will not be finalised until a DPT review has been concluded and, indeed, the continuation of an APA process with HMRC will itself depend on whether the underlying arrangements of the group are to be modified to avoid a charge under the DPT legislation. Assessment and payment mechanics Affected companies are required to notify HMRC within three months of the end of an accounting period (ending after 1 April 2015) in which it is reasonable to assume diverted profits might arise. It is noted that for accounting periods ending on or before 31 March 2016, the notification period has been extended to six months. A tax geared penalty applies if there is a failure to do this. In consequence of responses to the consultation, HMRC has relaxed the notification requirement such that it only applies where the financial benefit of the tax reduction is significant relative to the non-tax benefits of the actual arrangements. Moreover, there is no duty to notify in an accounting period if: it is reasonable for the company to conclude that no charge to DPT will arise in the current period (ignoring any possible future transfer pricing adjustments); before the end of the notification period, the HMRC officer has either confirmed that the company does not have to notify because HMRC has sufficient information to determine whether to give a preliminary notice, or it is reasonable for the company to conclude it has already supplied sufficient information to HMRC. It is noted that whilst HMRC will not provide a formal clearance in respect of DPT, it may be possible that HMRC could provide a written opinion on the likelihood of whether a DPT notice for a particular period will be issued; no notification was given or required to be given in a prior period and it is reasonable for the company to conclude there has been no change in circumstances which is material to whether a DPT charge may be imposed. This avoids annual notification requirements where circumstances are unchanged; or the company meets the tax mismatch test but UK tax has been paid on the relevant amount at 80% or more of the UK corporation tax rate (i.e. at least 16% tax has been paid on the relevant diverted profit amount). This does not apply, however, where the main purpose of avoiding the creation of a UK PE was to avoid or reduce a charge to UK tax. Where DPT is applicable, a designated HMRC officer will then issue a preliminary notice explaining why he/she considers the DPT applies, how diverted profits for the period are calculated, who is liable for the tax and when it would be payable. The relevant company has 30 days from the preliminary notice to make representations to the designated HMRC officer. Thereafter, HMRC has 30 days following the representation period to issue a charging notice or to confirm that no charge arises. The DPT will represent 25% of the diverted profit plus any true-up interest. True-up interest is treated as a component of the DPT and is to ensure equity between cases in which HMRC charging notices are issued promptly after the end of the relevant accounting period and those where notices may be delayed (which can be up to two years if the company has notified HMRC that there may be a DPT charge and four years otherwise). True-up interest is calculated by reference to a notional period beginning six months from the end of the

8 accounting period up to the date the charging notice is issued. It is noted that the initial estimated charge determined by HMRC and the final determination of the DPT are likely to differ. The HMRC officer is required to make a best judgement estimate of the amount chargeable. If tax deductible expenses have been incurred which are responsible for the tax mismatch and the HMRC officer considers the expenses might be excessive, the estimated charge for DPT will involve an upfront disallowance of 30% of the payment. Effectively, this would mean the taxable diverted profits for the purposes of the initial estimated charge in these circumstances would be calculated as 30% of the expense after adjustment for any transfer pricing adjustment made in the tax return of the company before the notice has been issued. The relevant company must then pay the DPT in full within 30 days of issue of a charging notice and no postponement of the tax is available in any circumstances. Interest and penalties will apply for late payment and if the company fails to pay DPT. It is noted that payments of DPT can also be taken from related companies where the DPT remains unpaid for 30 days after the date a charging notice to a non-uk resident is issued by HMRC. The related company can then recover DPT from the relevant taxpayer company. Following issue of the charging notice, there is a further 12 month review period within which the group will have the opportunity to demonstrate that they were not liable for the DPT or provide further information to HMRC regarding the level of the charge. After the review period, if the charge has not been withdrawn, the company has 30 days to appeal the charge to a Tax Tribunal. Conclusions Although a politically popular tax and despite modifications made to the final legislation to ease some of the administrative burdens involved in the notification process, the DPT will create onerous obligations on large multinational groups with UK activities to consider all their related party transactions in determining the possible application of the DPT. Any overseas company with UK activities (whether involving UK sales or foreign sales through UK functions) which generate more than 10m of revenues and incur more than 1m of expenses in respect of the UK activities will need to consider the application of these rules in determining whether it is required to notify HMRC. Groups have a short period after the end of their accounting period to notify HMRC unless they can reasonably conclude no charge to DPT would arise in the relevant period or they can reasonably conclude that they have supplied sufficient information to HMRC to enable its officer to determine whether or not to issue a preliminary notice to the company. Failure to notify where required to do so will result in a penalty. Large groups will also need to consider whether, in situations where there is a transaction involving a related foreign entity in a jurisdiction which imposes tax on income at a rate which is effectively less than 16%, HMRC would seek to recharacterise that transaction in determining the diverted profits. This will create a great deal of uncertainty as to the application of the rules and we envisage that the review process will result in lengthy negotiations with HMRC. In light of the BEPS proposals, which are seeking to address artificial diversion of profits through international consensus to effect changes to treaty rules (particularly as regards the definition of what constitutes a permanent establishment) and changes to the transfer pricing rules to attribute more value to activities along a global value chain and potential challenges to the legality of the legislation under EU law, it is possible that the DPT will only apply as a temporary measure. Indeed, the likely purpose of the DPT is to prompt groups to reorganise their related party arrangements to ensure that they do not fall within the ambit of the rules. However, in acting unilaterally, the Government cannot oppose action taken by other territories, such as Australia, to introduce similar rules which will significantly increase the risk of future double taxation to large multinational groups. Key contacts Nikol Davies Partner, London +44 (0) n.davies@taylorwessing.com Peter Jackson Partner, London +44 (0) p.jackson@taylorwessing.com Rob Young Partner, London +44 (0) r.young@taylorwessing.com Richard Carson Consultant, London +44 (0) r.carson@taylorwessing.com Europe > Middle East > Asia Taylor Wessing LLP 2015 This publication is intended for general public guidance and to highlight issues. It is not intended to apply to specific circumstances or to constitute legal advice. Taylor Wessing s international offices operate as one firm but are established as distinct legal entities. For further information about our offices and the regulatory regimes that apply to them, please refer to: NB_001561_04.15