Commentary

BB/12C/98 Overseas businesses established in the UK through agencies

Part V16 Forms and other HMRC material

BB/12C/98 Overseas businesses established in the UK through agencies

BB/12C/98 Overseas businesses established in the UK through agencies

Business Brief, Issue 12. 21 May 1998

This business brief explains the implications of decisions by the European Court of Justice (ECJ) in the case of C & E Comrs v DFDS A/S (C-280/95) [1997] STC 384 [Part V11], and the High Court in C & E Comrs v Chinese Channel (Hong Kong) Ltd [1998] STC 347 [Part V10], for businesses established overseas which carry on business in the UK through agencies.

Background

Business Brief 26/96 [BB/26C/96] outlined the case of WH Payne & Co v C & E Comrs [1995] V & DR 490 [Part V12]. The tribunal commented that treating a person who carries on a business in a country through a branch or agency as having an establishment in that country (VATA 1994 s 9(5)(a)) was inconsistent with Directive 77/388/EEC art 9. The business brief explained that Customs and Excise did not agree that the UK's “branch or agency” provisions were inconsistent with EC law. Customs would, therefore, continue to regard companies established overseas, which carried on a business through a branch or agency in the UK, as having a fixed establishment in the UK.

The subsequent case of CCHK looked at whether broadcasting services were supplied from its business establishment in Hong Kong or from a fixed establishment created by the agency of an associated company in the UK, Chinese Channel (UK) Ltd (CCUK). In finding that the supplies were made from Hong Kong, the tribunal again cast doubt on the

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