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The concept of permanent establishment (PE) is important for international groups because it will often determine whether a company has sufficient activity in another jurisdiction to create a taxable presence there.

For example, a company that is not resident in the UK will still be subject to UK corporation tax if it carries on a trade in the UK through a PE. Where it does so, it will be subject to UK corporation tax on all of the profits that are attributable to the UK permanent establishment. There are exceptions to this rule for any person:

1. •

   dealing in and developing UK land ― see the Transactions in UK land guidance note for further information

2. •

   directly or indirectly disposing of UK land ― see the Disposals of UK land by non-resident companies (NRCG regime) ― overview guidance note

3. •

   that generates profits from a UK property business ― see the Non-resident landlords scheme (NRLS) guidance note

CTA 2009, s 5(2)

In many cases, the focus will be