Commentary

D4.414 CFCs: low profit margin exemption

Corporate tax
Corporate tax | Commentary

D4.414 CFCs: low profit margin exemption

Corporate tax | Commentary

D4.414 CFCs: low profit margin exemption

A company is exempt from the CFC charge if its accounting profits are no more than 10% of its relevant operating expenditure. Accounting profits are profits before deduction of interest. Relevant operating expenditure is the operating expenditure brought into account in determining accounting profits, excluding the cost of goods purchased unless they are actually used in the CFC's territory of residence. The cost of any expenditure which gives rise directly or indirectly to income of a connected person1 is also excluded2. While this can be a useful exemption for CFCs that perform routine functions,

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial