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HMRC internal manual

International Manual

Double Taxation applications & claims: permanent establishment and special relationship: What a permanent establishment is

A Permanent Establishment (or ‘PE’ as it is often referred to) is a specific place in the UK where business of the overseas claimant is carried on. It may also be a person in the UK who acts for the claimant. Any of the following could be regarded as a PE.

  • an agent in the UK who has been given and continually uses comprehensive authority to conclude contracts in the UK in the name of the overseas claimant. This does not include an agent of independent status such as a general commission Agent acting in the ordinary course of any business
  • a branch of the overseas claimant carrying out only certain functions in the UK could be a permanent establishment even though an agency carrying out the same functions may not be
  • a subsidiary or associated company could be a permanent establishment if it carried out the functions of a branch or an agent of the claimant company but it is unlikely to be so. (A subsidiary does not have to be wholly owned by the claimant company).