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Application of the Eurobond exemption

This guidance originally appeared as a Revenue and Customs Brief published on 7 April 2008 and has since been updated.

There is an obligation on a company to deduct tax under ITA07/S874 on yearly interest but ITA07/S882 removes the obligation to deduct tax in respect of a quoted Eurobond. This is defined in ITA07/S987 (see also CFM11070).

A quoted Eurobond is a security issued by a company which carries a right to interest and is either:

• Listed on a recognised stock exchange; or
• Admitted to trading on a multilateral trading facility operated by a regulated recognised stock exchange.

In this context, a “recognised stock exchange�, is defined in ITA07/S1005. Wherever the exchange is established, the essential requirement is that it is designated as such by the Commissioners for HMRC.

A “regulated recognised stock exchange� is a recognised stock exchange that is regulated in the UK, the European Economic Area, or Gibraltar.

The definition of a “multilateral trading facility� is derived from EU Regulation 600/2014, as set out in ITA07/S987(2)(b).

These qualifications must be satisfied at the date of payment of the interest.

Companies considering applying for a listing or currently undertaking the application process should, before making the first payment of interest on the Eurobond, ensure that the Eurobond is listed or admitted to trading. Applying for a listing is not sufficient. For tables of recognised stock exchanges, follow this .

Companies relying on the Eurobond exemption must ensure the requirements for exemption are met before paying interest on the Eurobond.