How is company residence established? How do the courts decide company residence?
This is a freeview 'At a glance' guide to company residence and how it is viewed by the courts.
- A UK company is resident where its incorporated.
- Residence may be determined to be the place where it is centrally managed and controlled,
- A company may have a permanent establishment if has a fixed place of busuiness or a dependent agent.
- Taxing rights are determined by relevant double tax agreements (DTA) and domestic law. The DTA contains tie-breaker clauses.
- Anti-avoidance legislation may deem residency.
- See Tax Treaties
The established test for company non-residence has evolved as modern working practices have changed.
In the global economy, business can be conducted on a smartphone, tablet or computer from anywhere in the world. It is also quite easy to track the location of a sender of any electronic communication or text.
Businesses who are keen to stay offshore should have clearly defined policies in place to determine how and when their management business is conducted.
Useful guides on this topic
Companies: Permanent establishment & residence
What are the rules for determining a company's country of residence? What is central management and control? When does a company create a permanent establishment in another country?
Certificate of residence
Certificates of residence are often needed to ensure that double tax relief or treaty relief is accepted by a country in respect of particular income or profits.
Tax treaties: where to find them
What are the UK's Double tax treaties? What are the definitions and common terms are used in Double Tax Treaties? Where can I find a glossary?
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