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HMRC internal manual

International Manual

Non-residents trading in the UK: domestic law permanent establishment/branch or agency


Non-residents process map:- In all cases where you are considering the potential chargeability of a non-resident you should consider the facts of the case in the process illustrated below. The relevant guidance for each stage of consideration is sign-posted accordingly. This chapter of the guidance concerns stage 1 of the process laid out below and specifically whether the non-resident’s trading in the UK is carried out through a domestic law permanent establishment (formerly branch or agency) which is a requirement before the domestic charge is triggered. Where an enquiry into a non-resident is concerned stage 2 (the potential effects of any applicable treaty) and stage 4 (whether any tax liability can be collected) of the process should equally be under consideration from the outset.

| Stage 1
Is there a charge under domestic legislation on the activities in question? If there is not, you need consider the case no further. [INTM261000 to INTM264120]

Stage 2
If the non-resident is a resident of a state with which we have a Double Taxation Agreement, does the treaty restrict the domestic charge? [INTM265010 to INTM266160]

Stage 3
How much are the chargeable profits that can be taxed in the UK? [INTM267010 to INTM267170]

Stage 4
Having established that there is a domestic charge and having taken account of the effects of the relevant treaty, how do we assess and collect any tax that is due? [INTM268010 to INTM268050] | ||