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HMRC internal manual

International Exchange of Information Manual

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Action 5 rulings: Types of rulings to exchange: Permanent establishment examples

IEIM541310: Action 5 rulings: Types of rulings to exchange: Permanent establishment examples

 

Example 1

An overseas company incorporated and resident for tax purposes outside the UK opens an office in the UK.  It asks for an assurance that its presence in the UK does not constitute a permanent establishment.  After consideration of the facts it is agreed that that there is no permanent establishment and HMRC provides a letter to this effect.

 

Although HMRC has agreed that there is no taxable presence in the UK the ruling still needs to be exchanged with the relevant jurisdictions (IEIM540300).  It should also be exchanged under the DAC (IEIM550100).

 

Example 2

An overseas company requests approval that it qualifies for the Enterprise Investment Scheme (EIS).  As part of the due diligence required, HMRC considers whether the company has a permanent establishment in the UK.  After a review of the facts HMRC agrees that this is so.

 

The following should be exchanged with the relevant jurisdictions:

  • The ruling that there is a permanent establishment in the UK.  This should be exchanged under both Action 5 and the DAC, IEIM550100

 

The following should not be exchanged:

  • The ruling that the overseas company qualifies under the EIS.  EIS is not a preferential regime as defined in Action 5.

 

Example 3

An overseas company and a venture capital trust jointly request a clearance that the company has a permanent establishment in the UK.  After a review of the facts HMRC agrees that this is so, and, in addition, all of the requirements are met for the purchase of shares in the overseas company to be qualifying shares for the venture capital trust.

 

The following should be exchanged:

  • The clearance that the overseas company has a permanent establishment in the UK.  This should be exchanged under both Action 5 and the DAC
  • The clearance that the purchase of shares of the overseas company will be a qualifying purchase for the venture capital trust should be exchanged under the DAC only.