835AF Disregarded permanent establishment.

(1) In this Chapter, “disregarded permanent establishment” means a presence in a territory (in this subsection referred to as the “first- mentioned territory” )—

(a) which is treated for the purposes of the tax law of the territory in which an entity has its head office (in this subsection referred to as the “second-mentioned territory” ) as a permanent establishment of that entity,

(b) some or all of the profits or gains of which are not included for the purposes of domestic tax in the second-mentioned territory, and

(c) in respect of the profits and gains of which—

(i) where the first-mentioned territory is the State, the entity is not charged to tax under section 25, and

(ii) where the first-mentioned territory is not the State, the entity is not charged to foreign tax.

(2) In this section:

“domestic tax” means a tax chargeable on profits or gains, under the laws of a territory in which the head office of an entity is established, that is similar to income tax, corporation tax (including a charge under Part 35B) or capital gains tax;

“foreign tax” means a tax chargeable on profits or gains, under the laws of a territory in which the permanent establishment of the entity is established, that is similar to income tax, corporation tax (including a charge under Part 35B) or capital gains tax.