Jurisdiction(s):
United Kingdom

Key definition

UK permanent establishment definition

What does UK permanent establishment mean? In practice, a UK permanent establishment describes when a non‑UK resident company has a sufficiently fixed UK business presence, or a dependent agent here, so that part of its business is treated as carried on in the UK for corporation tax purposes. UK tax legislation (CTA 2009) defines a permanent establishment as either: (1) a fixed place of business in the UK through which the company’s business is wholly or partly carried on (for example, a place of management, branch, office, factory, workshop or certain resource‑extraction sites); or (2) a person acting on its behalf who has, and...

UK taxation of permanent establishments of non-UK companies: corporation tax, profit attribution, capital allocation, banking-specific rules, treaty interactions and compliance, with 2026 Finance Act updates

Published by a LexisNexis Tax expert

Practice notes

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Section 49 and Schedule 7 of the Finance Act 2026 update the UK’s domestic rules on UK permanent establishments of non‑UK companies, applying for accounting periods (for corporation tax) and tax years (for income tax) that begin on or after 1 January 2026. The provisions refine what counts as a UK permanent establishment and the framework for attributing Profits to such an establishment so that, in both respects, they more closely reflect the OECD Model Tax Convention. They also revise how the investment manager exemption applies. For further detail, see News Analysis: Budget 2025—Tax analysis — International.

A company that is not UK‑resident but trades in the UK through a Permanent establishment (PE) will be within the charge to corporation tax on the profits referable to its UK activities. This Practice Note explains the method by which the PE’s corporation tax charge is computed and how it is collected...

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Web page updated on 22/05/2026

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