Section 130 Interpreting provision about UK taxation of profits of foreign enterprises

(1)

Subsection (4) applies if double taxation arrangements make the provision, however expressed, mentioned in subsection (2).

(2)

The provision is that the profits of an enterprise within subsection (3) are not to be subject to United Kingdom tax except so far as they are attributable to a permanent establishment of the enterprise in the United Kingdom.

(3)

An enterprise is within this subsection if the enterprise—

(a)

is resident outside the United Kingdom, or

(b)

carries on a trade, or profession or business, the control or management of which is situated outside the United Kingdom.

(4)

The provision does not prevent income of a person resident in the United Kingdom being chargeable to income tax or corporation tax.

(5)

Subsection (4)—

(a)

does not apply in relation to income of a person resident in the United Kingdom if section 858 of ITTOIA 2005 (UK resident partner is taxable on share of firm's income despite any double taxation arrangements) applies to the income, and

(b)

does not apply in relation to income of a company resident in the United Kingdom if section 1266(2) of CTA 2009 (UK resident company that is partner in a firm is taxable on share of firm's income despite any double taxation arrangements) applies to the income.

(6)

A person is resident in the United Kingdom for the purposes of this section if the person is resident in the United Kingdom for the purposes of the double taxation arrangements.

Notes on Part 2

Modifications

C1: Pt. 2 modified by 1988 c. 1, Sch. 19ABA paras. 26-28 (as inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 34(3) (with Sch. 9 paras. 1-9, 22))
C2: Pt. 2 applied by 2010 c. 4, s. 269DL(6) (as inserted (with effect in accordance with Sch. 3 Pt. 3 of the amending Act) by Finance (No. 2) Act 2015 (c. 33), Sch. 3 para. 1)