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Foreign Branch

Foreign Branch

Hi Everybody,

I have a question. If a Uk company has a branch in Dubai, is it need to pay any taxes on the profits earned in dubai (or any losses can be net off against Uk company profits). Please provide HMRC references if available.

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06th Aug 2012 13:57

Taxable, but subject to election

All the profits and losses of a UK company, wherever they arise, are taken into account - so the profits are taxed and the losses relieved like any other trading profits or losses.  s5(1) CTA 2009.

Since 19 July 2011 it has been possible for a company to make an irrevocable election that its foreign branches are exempt from UK tax, so that neither profits nor losses are taken into account.  s18A CTA 2009.

 

Robert

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