We often hear that the world is getting smaller, thanks to opening of borders and faster communication. Many businesses are currently taking advantage and many more are thinking of doing so. However, for all the opportunities, there are challenges and pitfalls.
In recent years, we have seen that more clients are coming to us for advice on the business, accounting and taxation challenges facing them in their dealings overseas. We are also seeing an increased number of overseas businesses contacting us requiring assistance in setting up operations in the UK. The laws in the UK that regulate businesses and taxes are numerous and complex and so before any overseas business invests, they have to properly consider the best structure.
For any client considering expanding operations overseas, there are almost certainly going to be a significant number of challenges. This is often daunting and can put businesses off from making the commitment that could lead to increased profits and success.
Through our membership of HLB International we have access to experts around the world who, in conjunction with ourselves, will help expanding businesses overcome these challenges. HLB International is a fast-growing, dynamic network of independent accounting firms and business advisers. Formed in 1969, HLBI is a mid-tier international accounting network, servicing clients through its member firms in over 100 countries. Through this network Hawsons provide strategic, business and taxation advice relevant to the countries in which businesses are operating or considering operating.
Undoubtedly one of the biggest challenges anyone will face is trying to get a thorough grip of tax legislation in different countries. Through our own expertise and that of our network partners, we are able to advise on taxation issues and solutions throughout the world.
As part of our membership of HLB International we put a lot of time in increasing our knowledge and understanding of issues and in developing network contacts. Tax Partner Peter Kennan attends tax meetings in Europe and further afield in his role as Chair of the HLB UK tax group.
Peter answers here some of the more common questions regularly asked of him.
What are the challenges companies doing business globally face in the tax area?
“There are many minefields and companies need to be aware both of local requirements and internatioanl rules. We have a checklist of the issues to be dealt with when doing international business including international structuring, choice of entity, tax treaties, and withholding tax rates, capitalisation, transfer pricing, VAT, permanent establishment rules, immigration, and employment, and state vs provincial rules in some countries”.
What Tax challenges do global businesses face today
“The main challenge lies in the increasingly aggressive attitude of tax authorities around the world to protect their tax base – on transfer pricing for instance. Also there is a tendency for authorities to make unilateral decisions, often ending in potential for double taxation.
Another challenge is to get good advice, and this is something HLB can help companies with: we are more than a directory, we are a network. We know – personally know – our HLB colleagues in the major economies and elsewhere and they can help us solve problems for our clients”.
What are currently the main tax challenges in the UK?
“There is a lot currently going on in UK tax legislation and we need to make sure that all our firms in the UK have up-to-date knowledge and expertise. To give an example, the UK tax authorities are introducing for the first time statutory residence test as well as a general anti-abuse rule against tax avoidance. These are the big changes and should be explained.
For more details Peter can be contacted at firstname.lastname@example.org