INTM224000 - Controlled Foreign Companies: Entity Exemptions: contents

The profits of a CFC are exempt from the CFC charge if any one of five entity-level exemptions applies.

INTM224100 - Chapter 10 - Exempt Period Exemption

The Exemption Period Exemption provides an entity-level exemption for CFCs that have come under UK control for the first time. The period of exemption is temporary, usually 12 months.

INTM224700 - Chapter 11 - Excluded Territories Exemption

The Excluded Territories Exemption provides an entity-level exemption for CFCs that are tax resident in certain territories.

INTM225500 - Chapter 12 - The Low Profits Exemption

The low profits exemption provides an entity-level exemption for CFCs with low levels of profits in an accounting period.

INTM225700 - Chapter 13 - Low Profit Margin Exemption

The low profit margin exemption is an entity-level exemption aimed at those CFCs that perform substantial (in terms of volume) but relatively low value added functions outside the UK such as:

  • back-office functions,
  • local marketing and distribution operations,
  • toll manufacturing, or
  • call or data-processing centres.

INTM226000 - Chapter 14 - The Tax Exemption

The purpose of this entity level exemption is to easily exclude a CFC from having to apply the CFC rules to its profits when it pays a normal to high level of tax in its territory of residence.

  1. INTM224100
    Chapter 10 - Exempt Period Exemption: contents
  2. INTM224700
    Chapter 11 - Excluded Territories Exemption: contents
  3. INTM225500
    Chapter 12 - The Low Profits Exemption: contents
  4. INTM225700
    Chapter 13 - The Low Profit Margin Exemption: contents
  5. INTM226000
    Chapter 14 - The Tax Exemption: contents