Taxes Consolidation Act 1997 section 835AF

Disregarded permanent establishment

Section 835AF defines "disregarded permanent establishment" for the purposes of the anti-hybrid rules in Chapter 10A, and provides related definitions of "domestic tax" and "foreign tax".

• A disregarded permanent establishment is a presence in a territory that the head office territory treats as a permanent establishment but where some or all of its profits escape taxation in both territories.
• For the presence to qualify, its profits must not be included for domestic tax purposes in the head office territory and must also not be subject to tax in the territory where it is located.
• Domestic tax means a tax on profits or gains in the head office territory that is similar to income tax, corporation tax (including a charge under the controlled foreign company rules in Part 35B) or capital gains tax.
• Foreign tax means a tax on profits or gains in the territory where the permanent establishment is located that is similar to income tax, corporation tax (including a charge under Part 35B) or capital gains tax.