Corporate Tax: Residency & Control Insights - Acquarius

Done properly, setting up an international business or headquarter company overseas as part of a wider planning structure remains an attractive and feasible proposition. However, itis not something to be undertaken lightly and there are a number of important areas to take into consideration beforehand.
International cross-border tax is an extremely complicated professional field and it is fundamental that those looking to structure their personal or corporate affairs should seek appropriate professional counsel. Indeed, Acquarius’ view is that any such planning should be done properly - or not at all.
However, there are some core principles that we will explore in this and future articles on a jurisdiction’s or state’s “right to tax” income, profit or gains.
Competing international laws generally accept two very high principles. These are a) the right of a state to tax at source “source taxation” and b) the right to tax based on “residence”. Residence extends to “artificial persons” such as companies and is commonly referred to as corporate residence.
Some states (such as Gibraltar and Hong Kong) tax solely based on source. However, where a business trades internationally one must look at competing rights of other states to tax activities based on residence. This can give rise to what we refer to as Double Taxation. This is of particular concern for Gibraltar business who cannot solely look at source rules in Gibraltar but must also look at whether a second state may have the right to tax based on their activity or residence.
We will cover various areas of jurisdictional tax in a series of articles. In this first piece, Acquarius’ Managing Director Oliver Andlaw focuses on corporate residence, management & control and the importance of the fiduciary’s role. There are close links between the three that we should consider together.
Choosing professional directors wisely is essential. Acquarius is a long-established Gibraltar firm that has built an enviable reputation among some of the largest law firms in the UK.
Further Contact
These notes are not a substitute for proper professional advice and cannot be relied upon for any decision-making or taken as tax advice.
To arrange a no obligation consultation, please get in touch either directly or through your professional adviser.