Taxation (International and Other Provisions) Act 2010 section 371NA

Introduction to Chapter

Section 371NA introduces the tax exemption for controlled foreign companies (CFCs), which can exempt a CFC from a UK tax charge where it already pays sufficient local tax in its territory of residence.

• This section introduces Chapter 14, which sets out an exemption known as "the tax exemption" for CFCs.
• The tax exemption applies to the CFC as a whole, rather than to individual streams of income or profit.
• A CFC qualifies for this exemption if the local tax it pays on its chargeable profits is at least 75 per cent of what the corresponding UK corporation tax would be.
• Certain additional conditions must also be met for the exemption to apply.