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Corporation Tax Act 2010

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Corporation Tax Act 2010, Section 1143 is up to date with all changes known to be in force on or before 18 November 2019. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. Help about Changes to Legislation

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1143Preparatory or auxiliary activitiesU.K.
This section has no associated Explanatory Notes

(1)If the condition in subsection (2) is met, a company is not regarded as having a permanent establishment in a territory by reason of the fact that—

(a)a fixed place of business is maintained there for the purpose of carrying on activities for the company, or

(b)an agent carries on activities there for and on behalf of the company.

(2)The condition is that, in relation to the business of the company as a whole, the activities carried on are only of a preparatory or auxiliary character [F1and are not part of a fragmented business operation].

[F2(2A)Activities are “part of a fragmented business operation” if—

(a)they are carried on (whether at the same place or at different places in the same territory) by the company or a person closely related to the company,

(b)they constitute complementary functions that are part of a cohesive business operation, and

(c)subsection (2B) applies.

(2B)This subsection applies if—

(a)the overall activity resulting from the combination of the functions mentioned in subsection (2A)(b) is not activity that is only of a preparatory or auxiliary character, or

(b)the company or a person closely related to the company has a permanent establishment in the territory by reason of carrying on any of those functions.

(2C)A person who is not a company is to be treated for the purposes of subsection (2B)(b) as having a permanent establishment in a territory if, were the person a company, the person would have a permanent establishment in the territory.

(2D)For the purposes of this section, one person (“A”) is closely related to another person (“B”) if—

(a)A is able to secure that B acts in accordance with A’s wishes (or vice versa),

(b)B can reasonably be expected to act, or typically acts, in accordance with A’s wishes (or vice versa),

(c)a third person is able to secure that A and B act in accordance with the third person’s wishes,

(d)A and B can reasonably be expected to act, or typically act, in accordance with a third person’s wishes, or

(e)the 50% investment condition is met in relation to A and B.

(2E)The 50% investment condition is met in relation to A and B if—

(a)A has a 50% investment in B (or vice versa), or

(b)a third person has a 50% investment in each of A and B,

and section 259ND of TIOPA 2010 (meaning of “50% investment”) applies for the purposes of determining whether a person has a “50% investment".]

(3)[F3In this section] “activities of a preparatory or auxiliary character” include (without prejudice to the generality of that expression)—

(a)the use of facilities for the purpose of storage, display or delivery of goods or merchandise belonging to the company,

(b)the maintenance of a stock of goods or merchandise belonging to the company for the purpose of storage, display or delivery,

(c)the maintenance of a stock of goods or merchandise belonging to the company for the purpose of processing by another person, and

(d)purchasing goods or merchandise, or collecting information, for the company.

Textual Amendments

F1Words in s. 1143(2) inserted (with effect in accordance with s. 21(5)(6) of the amending Act) by Finance Act 2019 (c. 1), s. 21(2)

F2S. 1143(2A)-(2E) inserted (with effect in accordance with s. 21(5)(6) of the amending Act) by Finance Act 2019 (c. 1), s. 21(3)

F3Words in s. 1143(3) substituted (with effect in accordance with s. 21(5)(6) of the amending Act) by Finance Act 2019 (c. 1), s. 21(4)

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