Corporation Tax Act 2009

20 Profits attributable to permanent establishment: introduction U.K.

[F1 (1A) Sections 21 and 24—

(a) apply for the purpose of determining the amount of profits of a non-UK resident company that are attributable to a permanent establishment of the company in the United Kingdom, and

(b) contain provision about the separate enterprise principle.

(1B) So far as provisions in those sections are in substantially the same terms as Article 7(2) of the Model Tax Convention on Income and on Capital approved by the OECD Council on 18 November 2025 they are to be read and given effect, so far as possible, in a way that is consistent with—

(a) the 2010 Report on the Attribution of Profits to Permanent Establishments published by the OECD on 22 July 2010,

(b) the OECD’s commentary on Article 7(2) approved by the OECD Council on 18 November 2025,

(c) the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2022, published by the OECD on 20 January 2022, and

(d) the Additional Guidance on the Attribution of Profits to Permanent Establishments published by the OECD in March 2018.

(1C) Any reference in subsection (1B) to a document published by the OECD, or approved by the OECD Council, is to that document as it may be amended or replaced from time to time.

(1D) And any such document is to be read in accordance with any reservation, declaration or election made by the United Kingdom in relation to that document.

(1E) The Treasury may by regulations make provision—

(a) for subsection (1C) not to apply in relation to any specified amendment or replacement of a document referred to in subsection (1B),

(b) about the effect of any provision of a document referred to in subsection (1B) that has been amended or replaced on or after 26 November 2025 where that provision is elective (however expressed), and

(c) amending subsection (1B) to add a reference to a further document published by the OECD.

“Specified” means specified in regulations.]

F2 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1 S. 20(1A)-(1E) substituted for s. 20(1)(2) (for chargeable periods beginning on or after 1.1.2026) by Finance Act 2026 (c. 11), Sch. 7 paras. 4, 30

F2 S. 20(3) omitted (for chargeable periods beginning on or after 1.1.2026) by virtue of Finance Act 2026 (c. 11), Sch. 7 paras. 18(2), 30