The purpose of this entity level exemption is to 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. Any CFC that satisfies the tax exemption, does not need to be included in a chargeable company's corporation tax return.
A company is exempt from the CFC charge if the local tax amount is at least 75% of the corresponding UK tax1.
The local tax amount is the tax paid in the CFC's territory for that accounting period in respect of the CFC's local
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Web page updated on 17 Mar 2025 13:29