Income Tax Act 2007 section 302A

Meaning of "permanent establishment"

Section 302A defines what constitutes a "permanent establishment" in the United Kingdom for the purposes of determining whether a non-resident company has 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, workshop, mine or construction site) through which it wholly or partly carries on business, or if an agent habitually exercises authority to enter into contracts on its behalf here
• A permanent establishment does not arise where the activities carried on in the UK are only of a preparatory or auxiliary character, such as storing or displaying goods, maintaining stock for storage or processing by others, or purchasing goods or collecting information for the company
• Using an independent agent (such as a broker or general commission agent) acting in the ordinary course of that agent's business does not create a permanent establishment, nor does merely controlling a UK-resident company or a company that carries on business in the UK
• The Treasury has the power to amend the definition of permanent establishment by regulations