International Tax

Without wishing to resort to clichés, the world is getting smaller and increasing numbers of UK companies are looking to export or invest in new markets overseas in order to grow. Equally, supply chains are becoming more global and the opportunities to access new technologies or reduce costs by sourcing goods overseas are well known.

We have over ten years’ experience of working on cross border transactions and investments and of assisting UK companies trading overseas and overseas companies trading in the UK. As such, we are well placed to support you and your business. Our experience covers traditional export and investment markets such as the EU, USA, Canada and Australia but also covers emerging markets such as India, China, Russia and various parts of Africa. In particular, Iain Wright has been working with UK firms investing in India and Indian firms investing in the UK since 2005 and has visited India on numerous occasions to meet and present to Indian businesses and to assist UK investors there.

We are deliberately not members of an international network of accountants and see this as a virtue- Past experience of the networks operated by even the largest firms suggests that the quality of advice and service received from overseas network members can be extremely variable, despite the enormous expense incurred by them in vetting, monitoring and training member firms. With less formal networks operated by smaller firms, quality can be even more variable. As we are not members of a network, we are completely free to choose who we work with on your behalf. This may be your existing advisers or advisers who we have worked successfully with in the past. In either case, we are able to deal with specific individuals, ensuring that you are properly looked after. In the rare situations where such an existing relationship does not exist, we will seek recommendations from existing contacts or use market intelligence to identify the best adviser for your needs in a particular country.

Services for UK companies trading overseas

For UK companies trading overseas, we can advise on various matters, including the following:

  • Whether your activities will give rise to a taxable presence (a permanent establishment in the jargon of international tax practitioners) and the steps that can be taken to either avoid such a position or even to benefit from it;
  • Whether you will have a local VAT registration requirement;
  • Compliance with local tax and accounting rules if you do have a permanent establishment or VAT registration;
  • Secondment of staff overseas or employment of local sales agents;
  • Managing Customs Duties and VAT liabilities in the UK and the countries to which you are exporting; and
  • The taxation of profits derived from overseas sales in the UK.

Services for UK companies investing overseas

For many successful companies, exporting is only the first step to a greater involvement and investment in foreign markets. Many customers overseas will prefer to deal with a local office or subsidiary than with a company based thousands of miles away and a local presence can show a greater commitment to serving the local market. If an overseas investment is being considered, you will need to decide whether to acquire an existing business in the chosen market, to enter into a joint venture with a local company or to create your own business. We can advise you on the benefits and costs of each alternative.

We can also advise on many other aspects of cross border investment, such as the following:

  • Choice of local entity, i.e. representative office, branch or subsidiary;
  • Profit extraction from overseas subsidiaries, considering local taxes, withholding taxes and foreign exchange controls;
  • Structuring and financing of subsidiaries and joint ventures in order to minimise tax costs, including withholding taxes;
  • Acquisition structuring advice and due diligence if you are buying a foreign company;
  • Establishment of local entities, working in partnership with local advisers;
  • Transfer pricing;
  • The impact of UK rules on the taxation of foreign profits, including the controlled foreign company regime, the exemption from taxation of foreign branch profits and the taxation of dividends and capital gains;
  • Structuring international supply chains tax efficiently; and
  • Managing tax residence.

Services for foreign companies investing in the UK

The UK is ranked 7th out of 183 countries in the World Bank’s Ease of Doing Business table but there are a number of regulatory hurdles to overcome both when commencing to trade in the UK and in managing your ongoing operations. Many of the issues to be dealt with will be the same as those identified above for UK companies trading and investing overseas, but we can also assist with:

  • Managing your UK tax compliance requirements, including preparation and submission of corporation tax, payroll tax and VAT/ sales tax returns;
  • Preparation of statutory accounts;
  • Use of a UK holding structure to hold and manage other investments, particularly in Europe. Experience tells us that many investors from outside of Europe like to hold their investments in various European countries under one holding company and we can advise you on which country is most appropriate; and
  • Tax planning for your UK operations, taking into consideration the various ideas and opportunities discussed elsewhere on our website.