Finance Act 2011

28 (1) Section 78 (meaning of “overseas permanent establishment”) is amended as follows. U.K.

(2) In subsection (2)—

(a) in paragraph (a), for “and define the expression” substitute “ which contain a relevant non-discrimination provision ”, and

(b) in paragraph (b)—

(i) for “but do not define the expression” substitute “ which do not contain a relevant non-discrimination provision ”, and

(ii) for “is to be read in accordance with Chapter 2 of Part 24 of CTA 2010.” substitute “ has the meaning given by the Model Tax Convention on Income and on Capital published by the Organisation for Economic Co-operation and Development in July 2010 (“the OECD”) or such other document published by the OECD in place of it as is designated from time to time by order made by the Treasury. ”

(3) After that subsection insert—

“(3) In subsection (2) “relevant non-discrimination provision” means a provision to the effect that the taxation on a permanent establishment of an enterprise of a state which is party to the arrangements (a “contracting state”) is not to be less favourably levied in any other contracting state than the taxation levied on enterprises of that other contracting state carrying on the same activities.”