International tax should not be overlooked by UK SMEs that transact cross-border. Withholding taxes may be suffered in respect of foreign sourced income which may not be fully recoverable. This can create an absolute cost which must be considered when pricing a contract. Overseas activities could lead to the risk of creating a permanent establishment resulting in tax liabilities and filing obligations. Jurisdictions take different approaches in defining a PE, which means the UK SME must review its position on a country by country basis. Sales tax and employee taxes can also be an issue and ensuring compliance with local rules is vital.
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International tax should not be overlooked by UK SMEs that transact cross-border. Withholding taxes may be suffered in respect of foreign sourced income which may not be fully recoverable. This can create an absolute cost which must be considered when pricing a contract. Overseas activities could lead to the risk of creating a permanent establishment resulting in tax liabilities and filing obligations. Jurisdictions take different approaches in defining a PE, which means the UK SME must review its position on a country by country basis. Sales tax and employee taxes can also be an issue and ensuring compliance with local rules is vital.
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
