A deduction is allowed for any allowable expenses incurred for the purposes of the permanent establishment.

Expenses incurred for the purposes of the permanent establishment include executive and general administrative expenses so incurred, whether in the United Kingdom or elsewhere.

It does not matter whether the expenses are incurred by, or reimbursed by, the permanent establishment.

The amount of expenses to be taken into account under subsection (1) is the actual cost to the non-UK resident company.

“Allowable expenses” means expenses of a kind in respect of which a deduction would be allowed for corporation tax purposes if incurred by a UK resident company.