What is the definition of 'company' under Corporation Tax Act 2009 section 430?

Under section 430 of the Corporation Tax Act 2009, a 'company' means any entity listed in Part A of Annex I to the EU Mergers Directive. This is a specific and limited definition that does not include every type of corporate body, but only those recognised under the Directive for United Kingdom corporation tax purposes.

How is residence in a relevant state determined under CTA 2009 section 430?

Section 430 sets a two-part residence test. The company must be within a charge to tax in the relevant state as a resident. Additionally, it must not be treated as resident in a territory outside a relevant state under any double taxation relief arrangements to which that state is a party. Both conditions must be satisfied.

What happens if a company is treated as resident outside a relevant state under a tax treaty?

If a double taxation agreement treats a company as resident in a territory outside the group of relevant states, the company fails the residence test under section 430. This applies even if the company is nominally subject to tax in a relevant state under that state's domestic law. Both limbs of the test must be met.

Can you give an example of how the section 430 residence test works in practice?

A German GmbH listed in the Mergers Directive and subject to German corporation tax, not treated as resident elsewhere under any treaty, satisfies both conditions. Conversely, a company nominally taxed in a relevant state but treated under a treaty as resident in a non-relevant territory fails the second condition and does not qualify.

Corporation Tax Act 2009 section 430

Interpretation

Section 430 defines what is meant by "company" and when a company is considered resident in a relevant state for the purposes of this Chapter.

A "company" for this Chapter means any entity listed as a company in Part A of Annex I to the Mergers Directive.
A company is resident in a relevant state if it is subject to tax in that state as a resident for tax purposes.
The company must not be treated as resident in a territory outside a relevant state under any double taxation relief arrangements to which that state is a party.
Both conditions — being within a charge to tax as resident and not being treated as resident elsewhere under a tax treaty — must be met for a company to qualify as resident in a relevant state.

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