Controlled Foreign Companies: Entity Exemptions: Chapter 13 - The Low Profit Margin Exemption: contents
The low profit margin exemption is an entity-level exemption aimed at those CFCs that perform substantial (in terms of volume) but relatively low value added functions outside the UK such as:
- back-office functions,
- local marketing and distribution operations,
- toll manufacturing, or
- call or data- processing centres.
Any CFC that satisfies the low profit margin exemption, does not need to be included in a chargeable company’s corporation tax return.