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A non-UK company may be subject to UK tax either directly or indirectly. If the company is subject to UK tax, it may have a number of UK filing requirements (see the UK filing requirements guidance note).

The taxation of UK trading profits of overseas companies depends to a large extent on how the activity is structured and also whether the business is trading ‘in’ the UK or ‘with’ the UK. Broadly, an overseas entity trading in the UK via a UK permanent establishment (PE), typically a branch, will be subject to direct UK tax. Similarly, if the overseas entity establishes a UK subsidiary, that will be subject to direct UK corporation tax on its worldwide profits in the usual way. Conversely, an overseas entity (that is not UK tax resident) trading with the UK (eg purchases or delivery) does not generally bring the non-resident within the scope of UK tax. There are some limited exceptions to this which are set out below at ‘Indirect UK tax’.

Therefore, one of the key questions