The UK has three options for providing  relief from double taxation: two via credit relief and one by way of deduction  from the profits of the business.

Credit relief

Tax treaty relief

The UK has more than 115 tax treaties,  which may exempt income from tax in one country or give credit for foreign  taxes suffered on income. The precise mechanism will vary from treaty to  treaty. Treaty relief takes precedence over other forms of relief for foreign  taxes. For details on tax treaties, see the Structure of a tax treaty guidance  note. TIOPA 2010, s 9

To claim treaty relief, the taxpayer  must have been resident in the UK throughout the chargeable period. Residence  for these purposes is defined by UK law, not by the relevant treaty. See the  Residence of companies guidance note. TIOPA 2010, s 26

A non-resident company with a UK  permanent establishment can claim treaty relief on the same basis as is  available to a UK company. However, the total relief is not to exceed what  would have been available if the permanent establishment had been an entity  resident in the UK. See the Permanent establishment guidance note. TIOPA 2010,  s 30

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