Corporation Tax Act 2010

116 The EEA tax loss condition: companies not resident in EEA territory

(1) In the case of a surrendering company that is not resident in any EEA territory but is carrying on a trade in an EEA territory (“the relevant EEA territory”) through a permanent establishment, an EEA amount meets the EEA tax loss condition so far as—

(a) subsection (2) applies to the amount, and

(b) the amount is not excluded by subsection (3).

(2) This subsection applies to the EEA amount so far as it is calculated in accordance with the rules in the relevant EEA territory that are applicable for determining, in the surrendering company’s case, the amount of any loss or other amount eligible for relief from any non-UK tax chargeable under the law of the relevant EEA territory.

(3) The EEA amount is excluded so far as it is attributable to activities of the surrendering company that are subject to relieving arrangements.

(4) “Relieving arrangements” means arrangements within subsection (5) that have the effect mentioned in subsection (6) (or would have that effect if a claim were made).

(5) Arrangements are within this subsection if they are made with a view to affording relief from double taxation in relation to—

(a) any non-UK tax chargeable under the law of the relevant EEA territory and any non-UK tax chargeable under the law of any other territory, or

(b) any non-UK tax chargeable under the law of the relevant EEA territory and United Kingdom income or corporation tax.

(6) The effect referred to in subsection (4) is that the income or gains arising for the EEA accounting period from the activities are ignored in calculating the surrendering company’s profits, income or gains chargeable to non-UK tax under the law of the relevant EEA territory for that period.