International markets can present attractive opportunities for ambitious businesses, but as far as tax is concerned, there can be significant complexities. Seeking expert advice at an early stage will help overseas expansion go smoothly, minimising delays and avoiding unnecessary costs.
Businesses operating in the UK already have to contend with one of the world’s longest tax codes. Those with international operations also face the complexity of having to understand and comply with other territories’ tax regimes.
If you are expanding overseas you should consider carefully the activities to be undertaken offshore. RSM can work with you to think through the tax consequences and help you determine the form the overseas presence should take. For example, a new branch may need to be set up or a new foreign company might have to be incorporated. The best structure depends on many factors, including the nature of your business and future plans.
Our specialist team has a global reach and can assist you with the set-up, and provide support on the ground so you can be up-and-running in your new territory with ease.
A number of different areas of tax will need to be considered on an ongoing basis, including VAT and other indirect taxes, customs duties, payroll taxes and corporate income taxes. Dealing with the tax requirements of countries outside the EU can be particularly challenging for companies used to a European approach.
There are also implications for the UK company making the investment. These include anti-avoidance rules such as the diverted profits tax regime and the controlled foreign company rules, which can tax the UK shareholder on the profits of foreign companies in certain circumstances.
Transfer pricing and profit attribution considerations are also likely to be important. With the recent high-profile work of the OECD on reshaping the international tax landscape, cross-border tax issues are only going to become more significant.
RSM can help you consider your overall tax strategy to ensure it fits the countries in which you want to do business.
Please do not hesitate to contact us about our services. We would be pleased to discuss with you the opportunities that expanding overseas could have for your business.