International Tax

Changes in international tax regimes continue to present businesses with regulatory and operational challenges.

Did you know?

With transparency high on the global agenda, companies with international operations are actively reviewing their tax practices.

    Need to know…

    The international tax landscape is undergoing substantial change. Businesses with operations and interests in multiple jurisdictions have to keep pace.

    Implementation of the Base Erosion and Profit Shifting (“BEPS”) initiative, variations in local tax regimes and reporting duties, and the need to stay up to date with changes in regulations across regions all have implications for international companies.

    Faced with these changes in the global tax environment, businesses are reassessing their tax planning and compliance strategies with the objective of building sustainable, tax-efficient and compliant tax strategies that support cross-border transactions and global operations.


    What are the recent trends in international tax planning that businesses need to be aware of?

    Recent trends in politics and economics have resulted in new tax laws and regulations across the globe, with many jurisdictions displaying increasing vehemence toward tax enforcement.

    Businesses have to be switched on to these developments, and consider the impact of such trends on existing structures, and taking action as part of a proactive strategy for tax risk management.

    Brexit will continue to fuel uncertainty for taxpayers active in UK and European markets, with the impact on organisations’ operating structures and tax planning contingent on an exit deal being reached between the British Government and the EU.

    We are also seeing growing important apportioned to indirect taxes, including value-added taxes (VAT), goods and services taxes (“GST”), sales and use taxes, other consumption/transaction taxes, and real estate transfer taxes. For multinational companies, strategies are needed to deal with these trends effectively and favourably in the context of cross-border planning.

    It is the Base Erosion and Profit Shifting (“BEPS”) initiative which has and will continue to precipitate the most significant change in international tax planning.

    Companies are facing uncertainty around implementation of the many measures planned and approved under the initiative, with many jurisdictions having already taken action beyond BEPS guidance and recommendations.


    What is the Base Erosion and Profit Shifting (“BEPS”) initiative?

    BEPS is an OECD initiative to develop and implement an international framework that “addresses gaps and mismatches” in global tax rules.

    The implications on corporate international tax planning strategies are immense, extending to anti-avoidance measures such as GAARs, CFC regimes, thin capitalization rules and treaty anti-abuse rules; tax treatment of related-party debt financing, captive insurance and other intra-group financial transactions; international tax considerations of mismatches in entity and instrument characterisation; international tax aspects of transactions involving intangibles; recent developments concerning transfer pricing.

    For international businesses with multinational tax liabilities, it has become critical to stay up to date with progress on the implementation of BEPS. This involves assessment of the various measures and adapting tax planning strategies accordingly.

    For example, we are seeing enhanced coordination between authorities in enforcing tax laws and regulations, and companies should expect more aggressive transfer pricing audits across the globe. This includes a need to develop a unified, global strategy for transfer pricing documentation, including CbC reporting and preparation of Master and Local Files.

    What are the strategic challenges impacting international tax liabilities?

    You may be a multinational company looking to review your global intangible property strategy, or to rationalise your corporate structure.

    Whatever your strategic objective, we can support through cross-border planning and tax policy advice and strategies for optimising supply chain structures and related intercompany agreements in the face of a highly uncertain political environment, both at home and abroad. 

You may be a growing business looking to expand trade into new overseas markets, or to establish a physical presence in a new region.

    This will give rise to new risks of ‘tax nexus’ as your company falls under a new set of tax laws that you must comply with.

    Specialist international tax advice should help you to meet your requirements both in the new jurisdiction and at home on the most favourable terms for your business.

    We can help with decisions such as whether a branch of the UK company, an overseas subsidiary of the UK company, introducing an intermediary company in another country with more advantageous treaty agreement, which can significantly reduce withholding taxes, or a separate stand-alone overseas company is the best alternative.

    If you are planning to move or trade in a new jurisdiction, seeking early tax advice will ensure you are able to consider all relevant factors such as double taxation and benefit from favourable tax arrangements and the right structure for offshore arrangements can reduce tax exposure while still delivering the required level of control.

    Corporate tax advice for international trading businesses:

    Overseas expansion

    Clearly, where a business is looking to expand outside of the UK, then tax issues and opportunities are likely to arise. We can assist in this process.

    International real estate tax

    We have recently advised on a number of large scale property developments, including creating an investment structure for a US hotel complex looking to raise capital and targeting UK resident investors. We have also been involved in the process of setting up a Real Estate Investment Trust (“REIT”), which is to be listed on the Channel Islands Stock Exchange.

    Internationally mobile workers

    Business is now a global affair and, as such, companies which operate cross border are likely to have members of staff spending time in different locations. This may create tax complications.

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    Here to help

    At ETC Tax we are specialists in international tax management and compliance with local and international reporting obligations.

    We provide international tax advice to a wide range of clients around the globe on all areas of business tax relating to cross-border matters and global tax risk management.

    The tax implications of cross-border transactions vary in complexity, from the relatively straight forward through to the highly complex. We have experience across the spectrum.

    We advise on all aspects of global tax issues from international real estate tax, transfer pricing policies and documentation to managing withholding taxes and tax-efficient cross-border finance.

    We can help you minimise international taxes and tax risk and comply with tax regulations across the globe. We can structure your investments and tax planning in other countries tax-effectively without attracting scrutiny of local tax authorities.

    Our approach is to ensure your international tax strategy is aligned to your overall corporate strategy, through a wide variety of compliance and advisory services that avoid potential pitfalls, unforeseen tax liabilities or missed tax planning opportunities.

    We have recently advised on a number of large-scale property developments, including creating an investment structure for a US hotel complex looking to raise capital and targeting UK resident investors.

    We have also been involved in the process of setting up a Real Estate Investment Trust (“REIT”), which is to be listed on the Channel Islands Stock Exchange.

    We are also experienced in advising on the strategic and operational impact of BEPS. We are supporting businesses in taking a proactive response to the effects of BEPS on organisational tax planning. We undertake a BEPS risk analysis, enabling companies to assess how the initiative is affecting their business, and provide recommendations to adapt tax management strategies with minimal tax liability impact.

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