UK profits and permanent establishments

Stop Press: Clause 49 of, and Schedule 7 to, the Finance Bill 2026 (as introduced) amends the UK’s domestic legislation in relation to UK permanent establishments of non-UK companies, with effect for accounting periods (in the case of corporation tax) or tax years (in the case of income tax) beginning on or after 1 January 2026. The legislation amends the definition of a UK permanent establishment and the rules dealing with the attribution of profits to a UK permanent establishment in order, in each case, to bring them closer into line with the OECD Model Tax Convention. It also amends the application of the investment manager exemption. For more information, see News Analysis: Budget 2025—Tax analysis — International. To track the progress of the Finance Bill 2026 through Parliament, see: Tax—Finance Bill 2026 tracker—progress through Parliament.

When a non-UK resident company does business in the UK, it may be subject to UK tax.

For the circumstances in which a non-UK resident company is chargeable to corporation tax on income or chargeable, or is chargeable to income tax, see Practice Note:

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