Permanent Establishments “PE” – Non-resident companies & UK taxation

Many businesses have a place of origin in one territory but operate in other territories which can include an international presence from an employee or director perspective. 

 

A non-resident company will be regarded as having a permanent establishment in the UK if; 

 

 

In practice this can be where a business has a rental space or office, a fixed address, bank account or other physical presence. If an employee travels to that jurisdiction and conducts key business or carries out an activity that results in certain trading income on behalf of the parent company this will also trigger the parent company to have a permanent establishment in place. 

 

In order to determine the UK reporting requirements and tax consequences of a PE existing in the UK, reference must be made to any tax treaty that exists between the UK and the relevant home country. 

 

The existence of a PE can relate to whether withholding tax is required to be withheld and domestic payroll reporting for certain staff who are resident in the UK. Please contact our tax team for further assistance. 

Please do let us know if you have any questions or if you need any further help understanding the rules. – please call us on 01932 564098 or message us here. 

 

This article was produced in July 2021 – please always check with Fuller Spurling that information is current, up to date and applicable to your situation.