Clause 153 - Double taxation relief: profits attributable

Finance Bill – in a Public Bill Committee at 5:00 pm on 20th May 2003.

Alert me about debates like this

Question proposed, That the clause stand part of the Bill.

Photo of Stephen O'Brien Stephen O'Brien Shadow Paymaster General

The clause does not address the position of non-resident companies trading in the UK through permanent establishments, but is applicable to UK resident companies that have overseas permanent establishments. It amends section 797 of the Taxes Act 1988, which limits the credit for foreign taxes to the UK corporation tax rate.

The clause inserts into section 797 a new subsection (2A), which says that the chargeable profits attributable to an overseas permanent establishment are to be determined using, to coin another Latin phrase, mutatis mutandis, the rules in new section 11AA of the Taxes Act, introduced by clause 148(2) of the Bill for the purpose of taxing UK permanent establishments of non-resident companies.

Having explained the clause on that basis, I want to put it on the record that we regard the clause not only as unobjectionable, but as something that we support.

Question put and agreed to.

Clause 153 ordered to stand part of the Bill.

Clause 154 ordered to stand part of the Bill.

Schedule 27 agreed to.