Permanent establishment

Defined for UK tax purposes in sections 1141 and 1142 of the Corporation Tax Act 2010 as a fixed UK place of business through which the business of an enterprise is wholly or partly carried on, including a place of management, a branch, an office, a factory, a workshop, an installation or structure for the exploration of natural resources, a mine, an oil or gas well, a quarry or any other place of extraction of natural resources or a building site or construction or installation project. An agent acting for a non-UK resident company who habitually exercises (in the UK) authority to do business on the company's behalf may also create a UK permanent establishment. The term commonly arises in the context of double taxation treaties ( . The usual rule in a comprehensive double tax treaty is that only the country of residence can tax the profits of a trade or business, unless the profits arise from a permanent establishment in the other country. For a detailed discussion of permanent establishments and their tax treatment, see Practice note, Companies: UK residence and permanent establishments ( .

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