A clinet of mine moves around in different countries- he is currently in Berlin. As he is not a resident in the UK he does not pay income tax and does not pay income tax in Germany.
Is there a legal way he can avoid paying corporation tax on the same basis and is what he is doing now within the rule?
Individuals pay Income tax and Companies pay Corporation Tax.
You need to discuss which tax you are asking about as the rules are different!
I have clients that are not resident in the UK and do not have any duties in the UK so pay no Income Tax on their UK income. The companies they own however are registered in the UK and pay UK corporation tax. Is this what you are asking?
-- Edited by YLB-HO on Monday 19th of December 2011 02:12:18 PM
A company has to be incorporated somewhere. It's possible for your client to incorporate a company in a country that doesn't levy corporation tax (such as the British Virgin Islands) but other tax authorities may then look at where the company is being controlled. For example, a company is generally considered to be UK resident if it has been incorporated in the UK or is centrally managed and controlled from the UK. Depending on the client's particular circumstances, there may be other tax issues to consider.
Offshore tax planning is a complex area so, if this were my client, I would refer them to a practice that had expertise in this area so that they could get specialist tax advice.
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Pearce & Co - Chartered Accountant and Chartered Tax Adviser
