Policy paper

Reform of the foreign permanent establishment exemption

This measure reforms the taxation of foreign permanent establishments, making the elective exemption regime that applies to their profits and losses mandatory for Corporation Tax.

• From: HM Revenue & Customs
• Published: 13 July 2026

Documents

Corporation Tax — reform of the foreign permanent establishment exemption

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Draft legislation

PDF, 485 KB, 15 pages

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Draft legislation (accessible version)

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Explanatory note

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Details

This measure reforms the taxation of foreign permanent establishments, making the elective exemption regime that applies to their profits and losses mandatory for Corporation Tax.

This page includes draft legislation for consultation, as well as accompanying documents.

If you would like to respond to this consultation, you should email foreignpepolicy@hmrc.gov.uk by 13 September 2026.

Published 13 July 2026