Income Tax Act 2007 section 191A

Meaning of "permanent establishment"

Section 191A defines what constitutes a "permanent establishment" in the United Kingdom for the purposes of Part 4 of the Act, setting out the circumstances in which a non-UK company is treated as having a taxable presence here.

• A company has a permanent establishment in the UK if it has a fixed place of business here (such as an office, branch, factory, or construction site) through which its business is wholly or partly carried on, or if an agent habitually exercises authority in the UK to enter into contracts on the company's behalf.
• Activities that are merely preparatory or auxiliary in nature — such as storing or displaying goods, maintaining stock for processing by others, or collecting information — do not give rise to a permanent establishment, even if carried on from a fixed place of business or through an agent.
• A company does not have a permanent establishment in the UK simply because it operates through an independent agent (such as a broker or general commission agent) acting in the ordinary course of that agent's own business.
• Controlling a UK-resident company, or a company that carries on business in the UK, does not in itself mean the controlling company has a permanent establishment here.