ÀÏ˾»úÎçÒ¹¸£Àû

Branch exemption

A company can elect for its foreign branches to be exempt from corporation tax. In addition, the losses of exempt branches are not available to set against other profits.

This election is irrevocable and applies to all the foreign branches of a company.

The election must be made before the start of the first accounting period to which it will apply. See INTM281020 for details on the required form and information for the election.

The benefit of an election will depend on:

1. •

   whether losses may arise in the future in the company’s foreign branches

2. •

   the rate of overseas tax which is paid on the profits of the foreign branches

If significant losses are anticipated, then a branch exemption election may not be beneficial as these losses would not be available to set against UK profits of the company.

If the overseas tax is greater than the UK corporation tax on the same profits, this