Commentary on Sections Part 2: Charge to corporation tax: basic provisions Overview Section 29: Allowable deductions
138.This section brings together some general rules on deductions allowable in arriving at the profits of a permanent establishment. It is based on section 11AA(4) of, and paragraph 3(1) and (2) of Schedule A1 to, ICTA.
139.“Executive and general administrative expenses” in subsection (2) are not defined. The term is borrowed from Article 7(3) of the OECD Model Treaty. The Commentary on the Model Treaty does not define the term further but “executive expenses” would seem to cover the expenses of higher management of the permanent establishment.