Corporation Tax Act 2009 section 29

Allowable deductions

Section 29 sets out the rules for deducting expenses when calculating the taxable profits of a non-UK resident company's permanent establishment in the United Kingdom.

• A deduction is allowed for any allowable expenses incurred for the purposes of the permanent establishment, including executive and general administrative expenses whether arising in the UK or elsewhere.
• It does not matter whether the expenses are paid directly by the permanent establishment or reimbursed by it — they qualify either way.
• The deduction is based on the actual cost to the non-UK resident company, not a notional or arm's length amount.
• Allowable expenses are limited to the types of expense that would be deductible for corporation tax purposes if incurred by a UK resident company.