Taxation in the United Kingdom/Legislation/Section 148 of the Finance Act 2003

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A company has a permanent establishment in a territory if, and only if[1]:

  • it has a fixed place of business there through which the business of the company is wholly or partly carried on, or
  • an agent acting on behalf of the company has and habitually exercises there authority to do business on behalf of the company.

For this purpose a "fixed place of business" includes:

  • a place of management;
  • a branch;
  • an office;
  • a factory;
  • a workshop;
  • an installation or structure for the exploration of natural resources;
  • a mine, an oil or gas well, a quarry or any other place of extraction of natural resources;
  • a building site or construction or installation project.

A company is not regarded as having a permanent establishment in a territory by reason of the fact that it carries on business there through an agent of independent status acting in the ordinary course of his business. Also, a company is not regarded as having a permanent establishment in a territory by reason of the fact that:

  • a fixed place of business is maintained there for the purpose of carrying on activities for the company, or
  • an agent carries on activities there for and on behalf of the company,

if, in relation to the business of the company as a whole, the activities carried on are only of a preparatory or auxiliary character, which is taken to include:

  • the use of facilities for the purpose of storage, display or delivery of goods or merchandise belonging to the company;
  • the maintenance of a stock of goods or merchandise belonging to the company for the purpose of storage, display or delivery;
  • the maintenance of a stock of goods or merchandise belonging to the company for the purpose of processing by another person;
  • purchasing goods or merchandise, or collecting information, for the company.

References[edit]

  1. Section 148 of the Finance Act 2003