Schedule 26 - Non-resident companies: transactions
Finance Bill
4:45 pm
Mr Stephen O'Brien (Eddisbury, Conservative)
We come to schedule 26; this is the first time that we have strayed into the second volume of the Bill. The amendments relate to a similar line of argument.
The schedule largely re-enacts the existing law in section 127 of the Finance Act 1995 and the Opposition find it broadly acceptable. However, paragraph 2(c)(ii) seems to be anti-competitive because, if a broker is prepared to carry on business for less than the usual level of fee or commission, he risks becoming a permanent establishment of a non-resident company and liable for any corporation tax chargeable on the non-resident company as a consequence of transactions carried out through it. Amendment No. 92A would provide that a lower-than-customary fee or commission could safely be charged provided that the broker acted in an ''independent'' capacity. That is covered by paragraph 7(2) of the schedule.