Forthcoming change: In June 2023, HMRC opened a consultation on the ‘Reform of UK law in relation to transfer pricing, permanent establishment (PE) and Diverted Profits Tax (DPT)’. A summary of responses was published on 16 January 2024. For more information about the consultation, see News Analysis: TAMD 2023—consultation on reform of permanent establishment Rules.

On 28 April 2025, the government opened a consultation on draft legislation reforming the UK’s PE rules to (i) align the domestic legislation dealing with the attribution of profits to PEs with the latest OECD documents and interpretation of the ‘separate enterprise principle’, (ii) update the domestic definition of a dependent agent PE in line with the 2017 version of the OECD Model Tax Convention, (iii) amend the scope of the investment manager exemption, (iv) align the domestic treatment of gains attributable to PEs with the 2017 version of the OECD Model Tax Convention, and (v) make consequential amendments to ensure that PE principles are consistently replicated across UK tax legislation. The draft legislation does not affect the content or operation