Expanding abroad

The domestic legislation of the country concerned is critical regardless of whether there is a double tax agreement in place between that country and the UK. If there is a double tax treaty between the UK and that country, that can help determine the tax position. Often one of the first direct tax i...

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Bibliographic Details
Published in:Taxation 2012-03, Vol.169 (4345), p.12
Main Author: Welland, Ross
Format: Magazinearticle
Language:English
Subjects:
Corporate tax planning
International taxation
Jurisdiction
Permanent establishment
Withholding taxes
Online Access:Get full text
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Summary:The domestic legislation of the country concerned is critical regardless of whether there is a double tax agreement in place between that country and the UK. If there is a double tax treaty between the UK and that country, that can help determine the tax position. Often one of the first direct tax issues a business will come across when it starts trading extensively outside the UK is withholding tax on payments it receives from customers. From the adviser's perspective, the objective must be to minimize withholding tax as far as possible for the client. It is important to start with the domestic legislation of the country involved to see how it defines permanent establishment and how that fits with the clause in the relevant double tax agreement. If the decision has been made to set up a company in the non-UK jurisdiction from where the UK company is operating, the matters of funding that entity and bringing funds back to the UK arise. The key point will be making sure that any administrative procedures needed in a jurisdiction to allow treaty relief to be claimed are in place.
ISSN:0040-0149