Corporation Tax Act 2009 section 1138B

Exempt foreign permanent establishments

Section 1138B defines when a company's expenditure is treated as "attributable to an exempt foreign permanent establishment" for the purposes of the intangible fixed assets rules.

• This definition is relevant to the intangible fixed assets rules (Part 8 of CTA 2009) and applies on an accounting period basis.
• Two conditions must both be met for expenditure to be classified as attributable to an exempt foreign permanent establishment.
• The company must have a valid election in place under section 18A (the foreign permanent establishment exemption) that covers the accounting period in question.
• The expenditure must be included in calculating either the relevant profits amount or the relevant losses amount under that same exemption for the period.