Corporation Tax Act 2009 section 18I

Exemptions from anti-diversion rule

Section 18I sets out how the controlled foreign company (CFC) exemptions can be applied to prevent the anti-diversion rule from triggering a diverted profits charge on a company's permanent establishment.

• The CFC exemptions in Chapters 11 to 14 of Part 9A of TIOPA 2010 can be used as a defence against the anti-diversion rule
• When applying these exemptions, the permanent establishment must be treated as if it were a separate CFC resident in the territory where it is located
• The hypothetical CFC's assumed total profits and assumed taxable total profits are both taken to be the adjusted relevant profits amount, and certain modifications are made to the definition of "related" person
• The CFC is treated as connected or associated with the company and with anyone connected or associated with or having an interest in the company