Section 116: The EEA tax loss condition: companies not resident in EEA territory
425.This section identifies the EEA amount in the case of a company with a permanent establishment in the EEA. It is based on paragraph 4 of Schedule 18A to ICTA.
426.Subsection (1) applies the section to companies not resident in the EEA. The other sort of EEA related companies (thoseresident in the EEA) are dealt with in section 115.
427.Subsection (2) sets out the main condition: it establishes that the Chapter is concerned with an amount that has arisen for tax purposes in an EEA territory.
428.Subsection (3) excludes an amount that arises from activities the profits of which would be exempt under a DTA.
429.Subsection (4) introduces subsections (5) and (6), which explain the sort of arrangements with which subsection (3) is concerned.
430.Subsection (5) sets out the relevant arrangements. They are arrangements between the EEA territory where the permanent establishment is and:
the United Kingdom (paragraph (b)); or
any other territory (paragraph (a)).
431.Subsection (6) identifies the effect of the DTA: it is that any profits from the activities in question would be exempt from tax in the EEA territory.
