The Meaning of “Enterprise”, “Business” and “Business profits” in the UK’s Double Taxation Conventions

The terms “enterprise” “business” and “business profits” are used extensively in the OECD Model, which is the basis for the majority of the UK’s double tax conventions, and are central to the accepted rationale for attributing the right to exercise jurisdiction to tax on a source basis. However, none of these concepts is exhaustively defined. This paper focuses on the difficulties faced by the UK Courts and tax authorities in interpreting these terms in the context of permanent establishment provisions contained in UK tax treaties, and pays particular attention to the interaction between treaty law and the UK’s domestic law, including comparative law and public international law. It also highlights the problems which may arise where a differing interpretation of these terms are applied by reference to different countries’ domestic tax systems.