VAT Rates

Tax Planning Consultancy

If Your Expertise is needed Abroad we can Save You Tax!

With the growing demand for professional consultants to work outside their usual countries of residence there is often the possibility of greatly reducing or even eliminating individual and corporate tax consequences - often using tax planning companies. The reason that this possibility arises is that it is often possible to legally extricate oneself from the tax system of one's home country for a fiscal year or more. During this expatriate period it may then be possible to avoid the tax system(s) of the chosen host jurisdiction by limiting one's period of residency in any given country to between 4 and 6 months. These being the normal European 'breathing' periods before full local tax obligations exist. The purpose of the company is to provide a fiscally beneficial entity to issue necessary invoices, register for VAT and/or act as a controlling vehicle for future 'home' country remittances.

Key Factors that a UK Tax Planner will consider

The personal circumstances of international consultants will of course vary greatly, however there are some generic questions that a professional tax planner will always ask including:

  1. The domicile of the client, as this can have consequences on how the client will be taxed especially in countries such as the United Kingdom and Republic of Ireland. In the case of both countries, non-domiciled but ordinarily resident individuals need only be taxed on their remitted income where either (in the case of the UK) they have only lived in the UK for less than 7 out of the previous 9 years or even better, in the case of Ireland, where there are no time restrictions;
  2. The location of the end clients, which by definition must be located outside of either the UK or Ireland;
  3. Whether, which is what is generally required, all the work for the end clients is actually executed outside of the UK and/or Ireland;
  4. Whether there are or can be non-UK and/or Irish sub-contractors;
  5. Confirmation as to the required income that is needed by the client to live back in the UK and/or Ireland as this will generally be the amount that should be declared to HMRC or the Irish Revenue Commissioners

Once these and other questions are answered an SCF consultant will be in a position to discuss the potential savings and whether a structure is economic in any given set of circumstances. In particular, it should be noted that in many cases, it is no longer possible simply to set up a traditional offshore company/tax haven company as modern anti-avoidance provisions normally demand (depending on the countries involved) the use of a genuinely managed and controlled company (albeit one in a low tax jurisdiction) preferably with double taxation treaty and even EU directive/regulation protection. However, for the relatively high earning international consultant it is often possible to significantly mitigate tax exposure using legitimate managed low tax offshore structures. For more information, why not make an appointment to see if the SCF Group can help you as it has already helped literally thousands of international consultants save tax over the last 20 plus years?