International tax update & Comparisons to the UK tax system

You might think that an International Tax Conference would not be the most exciting event to attend? Well, 3 members of the Shorts Tax Team recently attended an excellent International Tax Conference in Berlin which was actually pretty interesting! Covering both International Tax and aspects of international trade, the conference was attended by delegates from all over the world from accounting firms who, like Shorts, are members of the Praxity Group – an alliance of accounting firms from right around the globe.

Summary of ideas and thoughts gleaned from the trip:

Berlin is a very nice city – especially the riverside beer gardens when it is 35 degrees outside!
The UK tax system for entrepreneurs and businesses is very competitive compared to similar economies worldwide.
Anyone trading in the USA who hasn’t taken tax advice in the past few years should really do so. The American tax system has changed significantly and it is very easy for businesses or individuals present in the US to innocently encounter tax problems. The broad aims of the changes are to encourage US businesses to move cash and activities back to the US rather than going offshore to take advantage of more beneficial tax rates.
The US penalty regime for failing to file a return is hideous – penalties of $30,000 can be charged for failing to file a simple form in some instances.
Thailand has a tax regime that seems to encourage expats to relocate there. There are lots of tax advantages there.
You assume that other industrialised first world economies levy similar taxes to the UK. This is not the case at all. In the UK we pretty much tax every sort of transaction and profit you can make – this is not the case in lots of other countries. Many don’t have an equivalent of our Capital Gains and Inheritance Taxes for example.
Conversely, other countries have different types of taxes to the UK. This means that if you are doing business or residing in another country, even if only to a small extent, you should seek tax advice to ensure you comply with local tax regulations and take advantage of relevant tax reliefs. Shorts recently completed an exercise on behalf of a client where we quickly established, through our Praxity Alliance partners, that there were minimal compliance issues in overseas jurisdictions. For a small outlay our client was able gain comfort that all compliance requirements are being met and confirm that large penalties are not accruing overseas.
Many countries now have R&D tax reliefs or similar incentives to encourage innovation. There is a bit of a race to become the most innovation friendly tax system.

Conclusions

So there you go – who knew that tax could be so interesting! The International Tax system is very complex and with many countries keen to collect tax from anyone living or doing business in their jurisdiction, it really is vital that anyone operating abroad take the appropriate tax advice. International trade is a key focus for the UK government and we see more companies trading abroad as the world generally becomes a smaller place.

If you are interested in finding out more about any of the above items are have any other international tax queries, please get in touch and we, in conjunction with our Praxity partners, will be able to help.