Overseas Companies

Overseas entities will only be taxable in the UK if they are trading in the UK rather than trading with the UK.

If they have a PE in the UK they will be treated as trading in the UK and thus will be taxable on an appropriate share of profits made from such trading. In the UK a PE is present if:

a. There is a fixed place of business here through which a business is wholly or partly carried on, or

b. an agent acting on behalf of the business has and habitually exercises, in the UK, authority to do business on behalf of the business (but see below).  Fixed place of business PE

A fixed place of business permanent establishment can include:

a. a geographic place of business, possibly premises or a site, although it can, in certain circumstances, be machinery or equipment;

b. a place of business which is fixed, that is, have a certain degree of permanence, and the business must be carried on through this fixed place of business, normally by the personnel of the enterprise.

Examples given in UK legislation include:

a. a place of management
b. a branch
c. an office
d. a factory
e. a workshop
f. an installation or structure for the exploration of natural resources
g. a mine, an oil or gas well, a quarry or any other place of extraction of natural resources
h. a building site or construction or installation project.

Aside from the ease of establishing a business presence in the UK, there are generous tax incentives available for innovative businesses, which can reduce the already low corporation tax rates further.

If you require further information in relation to establishing a uk presence of your business or any issues covered by this aspect, please contact our office on 020 8768 5628.