During our series of International Tax blogs we have covered the key steps that should be considered when a business is considering undertaking work overseas.
We initially looked at the importance of companies engaging with AAB at an early stage of working overseas. We have experienced numerous incidents of companies being naive to the tax implications of working overseas and, as a result ,this has led to companies making losses or greatly diminished profits on jobs due to the unexpected tax costs that had not been anticipated when pricing the work. We provide our clients with proactive and commercial tax advice and, early involvement of our international tax team at the tender phase of a contract allows our clients to fully understand the tax implications and costs of the contract thus ensuring the contract is properly priced and managed and the company is tax compliant.
Following this we discussed the importance of understanding the project(s) that the business is undertaking when they are working abroad. It is essential to understand what the work entails, where it is going to be performed (i.e. onshore/offshore) and who will be performing it. After this we explained the importance of a review of the draft contract. The reason for this is that, in the event of a challenge by an overseas tax authority, the contract is often the key piece of evidence used by a company to defend itself. Once this work is done the next task is to understand any resultant tax consequences of undertaking the work overseas, whether this be corporation taxes, employee taxes or indirect taxes.
Finally, we looked at ensuring that any additional costs of working overseas are factored into the pricing model which can only be done if these costs are understood before any contract is signed.
For more information or if you require assistance when working overseas, please contact the International Tax Services team at email@example.com or your usual AAB contact.
To find out more about the International Tax Services team, please click here.