Controlled Foreign Companies: The CFC Charge Gateway Chapter 4 - Profits attributable to UK activities: Exclusions - Trading profits: The export of goods condition
The export of goods condition is intended to limit the extent to which a CFC can generate income by exporting goods from the UK. In common with the other conditions, the logic here is that if a significant proportion of the CFC’s income is generated by the export of goods from the UK, it is likely that those profits are supported by UK activity. The conditions for exclusion are intended to act as a proxy for the SPF approach and a restriction on income generated by the export of UK goods is appropriate to that purpose.
This condition is also intended to restrict invoice routing operations which generate sales income for a CFC but which rely on the supply of goods from the UK.
The condition is met if no more than 20% of the trading income of the CFC arises from goods exported from the UK. However, goods which are exported from the UK into the CFC’s territory of residence are disregarded.