A tax paid by companies on the profits of its business. The term profits includes all sources of income (other than dividends from UK companies) and chargeable gains (www.practicallaw.com/A34646). Companies resident in the UK are charged to corporation tax on their worldwide profits (subject to double taxation relief (www.practicallaw.com/A34912) for foreign taxes). Companies that are not resident in the UK but which have UK source profits are charged to corporation tax on their UK source profits only if the company trades in the UK through a permanent establishment (www.practicallaw.com/A36648) and the UK source profits are derived through that permanent establishment. A company pays corporation tax by reference to each accounting period (www.practicallaw.com/A34577). The rates of corporation tax are fixed for financial years which run from 1 April to 31 March. Companies usually pay corporation tax within nine months from the end of the relevant accounting period but large companies are required to make quarterly instalments. For further details, see Practice note, Direct taxes: Corporation tax (www.practicallaw.com/5-107-3724).