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HMRC internal manual

General Insurance Manual

HM Revenue & Customs
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Double taxation relief: overseas branch profits: foreign taxes on UK insurers: deemed "permanent establishment"


Some of the UK’s tax treaties deem an insurer to have a permanent establishment in a country if it insures risks there, or collects premiums, through an agent. The precise wording differs from treaty to treaty, but reinsurance business is normally excluded from the rule, and it normally only applies if the agent is not of independent status, or has and habitually exercises an authority to conclude contracts in the name of the insurer. The precise wording of the particular treaty will need to be considered in cases of dispute. However, it is our view that, generally speaking, the foreign State will only be entitled to levy tax on the strength of such a provision to the extent that profits are derived from the activities of an agent who is exercising a binding authority to conclude contracts in the name of the insurer. Examples of such treaties include those with France and Belgium, Indonesia, Ivory Coast, Jamaica, Kenya, Mexico, The Philippines and Tunisia.