»Ê¹ÚÌåÓýapp

»Ê¹ÚÌåÓýapp CFC is taken to be resident in the territory under the law of which it is liable to tax by reasons of its domicile, residence or place of management at all times during the accounting period.

A CFC is regarded as liable to tax in a particular territory if it is within the charge to tax there even though it may actually pay no tax; for example because of losses or double tax relief, or because, for whatever reason, the tax authorities do not in practice assess or collect the tax for which the company is legally liable. »Ê¹ÚÌåÓýapp tax in question must be a tax similar in nature to UK taxes on profits, namely, income or corporation tax. It would not include turnover or payroll taxes, or flat-rate levies.

»Ê¹ÚÌåÓýapp legislation refers to “territoryâ€� throughout rather than “countryâ€�. This is so that it covers jurisdictions such as the Channel Islands and the Isle of Man which do not have full independent status. However, in its application to federal states such as the U.S.A. and Switzerland, “territoryâ€� signifies the country and not an individual state.

“Domicile� covers territories which charge companies to tax on the basis of incorporation, registration under their laws or some similar criterion.

“Residenceâ€� is to be interpreted in accordance with its meaning in UK tax law; that is the central management and control test. »Ê¹ÚÌåÓýapp term is therefore appropriate only to territories with a test of residence similar to the UK test.

“Place of managementâ€� covers territories in which liability to tax depends on some particular level of management being carried out in those territories. »Ê¹ÚÌåÓýapp term includes many of the criteria for corporate tax liability which are used overseas such as ‘effective managementâ€�, ‘seat of businessâ€�, ‘central administrationâ€�, ‘head officeâ€�, ‘principal place of businessâ€� and other similar criteria.