Multi-jurisdictional Tax

Multi-jurisdictional tax issues

Governments negotiate trade treaties, tax information treaties, transfer pricing agreements, double taxation agreements, in order to facilitate international trade and to ensure the application of taxation to such trades or investments is both clear and fair. Such international agreements take priority over national rules for specific taxes in defined circumstances. Unfortunately, there are relatively few world agreements (largely for trade) and multitudes of bilateral tax agreements, each of which is individually negotiated and which may vary in small or large part from similar treaties negotiated by one government with other partners. Knowing the detail of treaties that apply to your particular circumstances ensure that your tax affairs are kept up to date and compliant in each of the jurisdictions in which you are exposed and at the same time can provide opportunities for restructuring your affairs more effectively to thereby to legally minimise the taxation that you suffer.

Most clients with exposure in several tax regimes employ accountancy services in each of them. However, relatively few local accountancy firms look outwards at international agreements that might be enforced; they concentrate instead on compliance with local laws. This may well mean that, if your affairs have multi-jurisdictional tax issues, then you will be paying tax in several jurisdictions, but may be paying more tax overall than is legally necessary. A survey of the international agreements that affect you might reveal the opportunity for significant tax savings.

Multi-jurisdictional tax reduction

Companies normally grow and expand organically; individuals invest across borders as opportunities arise. Rarely do companies or individuals fully study the tax implications of their actions in the new countries in which they work or invest or the cross border tax issues which may either affect them or provide opportunities for them. Correctly structuring international investments and or international corporate trading can allow the use of government-negotiated tax and trade treaties to significantly reduce and legally minimise the total tax exposure across all of the countries concerned. We would be happy to consult with you, to research and to recommend effective structures and arrangements that take advantage of government negotiated treaties to legally reduce and minimise your total tax exposure. The costs of such work are normally recouped many times over through the tax savings that follow in the months and years to come.

Please note that planning can only potentially reduce future taxation. Appropriate arrangements and structures need to be in place before a taxable event is crystallised.