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Aberdeen – Stavanger Gateway 3 June 2014 International Tax Issues Kevin R Mann Overall Tax Objectives – International Projects Overall Objectives “Proactive and Commercial” Understand project Review/amend onerous contract terms Understand & minimise overseas tax exposures Factor additional tax/compliance costs in bid price Minimise risk of overseas tax compliance failure “AAB are providing us with advice regarding our overseas employee assignments to Norway. In addition to providing us with guidance from a company perspective, AAB prepared summaries targeted at the employee’s perspective and these were particularly useful in effectively managing our communication of these sometimes delicate issues with our employees affected. We are confident that AAB will keep us on track in relation to our compliance obligations in Norway and are very pleased with the comprehensive and efficient service provided by the AAB team.” Alan Cormack Nautronix Corporate Tax Considerations Carrying on Business in overseas country through permanent establishment (PE)? Rates of Corporation Tax on profits of PE? Double Tax Relief in Home Country? Subsidiary v Branch / PE in overseas country? Other Indirect Taxes? Influence of UK / Norway Double Tax Treaty (DTT) Onshore (Art 5) – Various definitions of PE Offshore (OA’s) (Art 21) – Deemed PE if OA’s > 30 days in any 12-mth period UK – 21% (20% from 1 April 2015) Norway – 27% UK – Restricted to 21% (20% from 1 April 2015) – 6% (7%) incremental tax cost Norway – Likely full credit obtained Tax rates as above Repatriation of post-tax profits? VAT? PAYE / Wage tax? Customs duties? Overseas professional fees? Employment Tax Considerations Income Tax Payable in Overseas Country? PAYE / Wage Tax Obligations of Employer? Rates of Income Tax Payable? National Insurance Liabilities? Influence of UK / Norway DTT Onshore (Art 14) – Conditions for exemption Offshore (OA’s) (Art 21) – All remuneration liable to tax Double Wage Tax deductions (UK and Norway)? Need to be managed UK – Net of Tax Credit arrangement Norway – Double Tax Credit Relief UK – 20%, 40%, 45% Norway – 27%, 36%, 39% Continuing liability in home country (A1 Certificate)? Both employee and employer contributions "As a company we routinely are called to tender for projects in what are ‘frontier’ regions for us often with complex tax regimes and testing legislation relating to international suppliers. Thorough, up to date and concise advice underpin our commercial proposals, and in these respects AAB have never failed to deliver, even at very short notice” Gary Thirkettle Calecore Limited Contact DetailsTax Team – who’s who International Kevin R Mann - Partner Telephone: Email: 01224 625111 [email protected]