Relief for foreign corporation / income tax

I reside in Norway, and I'm the director, owner and sole employee of a UK limited company that provides consulting services. Since the services are generally delivered from my place of residence in Norway, the UK company has a Norwegian branch, and must pay corporate income tax there for receipts. In fact, most or all receipts are taxable in Norway, and the company has very little activity in the UK itself. Since the UK has a double taxation treaty with Norway, I was looking for guidance for how to avoid double taxation. So far, we've been doubly taxed, and tax authorities in Norway indicated that relief must be sought in the UK.

Hi ,
 

Thank you for your query. The rules governing company residence are complex. We can provide some links to HMRC guidance that will explain the principles of residence and double taxation, but we suggest that you take advice from a tax professional if you need further guidance. You would first need to a determine the company’s actual country of residence for tax purposes. The basic rules are explained at INTM120010 - Company residence: why is company residence important?   . A company can be regarded resident in both states under domestic law, for example if the place of incorporation is in one state and the place of central management and control is in the other. This is known as ‘dual residence’. If the company is considered tax resident in both the UK and Norway, you can apply under the double-taxation agreement for the competent authorities of both countries to determine by mutual agreement the country to which tax residence is awarded. This is referred to as a tie-breaker. Please go to INTM154050 - Double taxation agreements: residence: Companies for more information. You can find the contact details of the UK competent authority at INTM423110 - Transfer Pricing: methodologies: Mutual Agreement Procedure: HMRC contacts  . If residence is awarded to the UK, the company will be liable to corporation tax in the UK on its worldwide income. It can then claim relief for any foreign tax suffered, either through its tax return or by presenting a certificate of residence to the overseas tax authority. If residence is awarded to Norway, the company will pay corporate tax on its worldwide income in Norway, though any profits arising from a trade carried on through a UK permanent establishment will be liable to UK tax. HMRC guidance on the methods of claiming relief from double taxation is at INTM151040 - Double taxation: concept and principles: Methods of relief  .  Thank you .