Corporation Tax Act 2010 section 357NC

The separate enterprise principle

Section 357NC establishes the separate enterprise principle, which determines how to calculate the profits of a company that are attributable to its Northern Ireland Regional Establishment (NIRE) by treating the NIRE as if it were an independent, standalone business.

• Profits attributable to a company's NIRE are those the NIRE would have earned if it were a distinct and separate enterprise carrying on the same or similar activities under the same or similar conditions
• The NIRE must be treated as dealing wholly independently with the rest of the company, as if it were an arm's length third party
• For the purposes of this calculation, the NIRE is assumed to have the same credit rating as the company and to hold whatever equity and loan capital it could reasonably be expected to have in those circumstances
• This approach is formally defined as "the separate enterprise principle" and is used throughout the Northern Ireland regime provisions in this Chapter