Tax Structure & Strategy for International Expansion

BUILDING THE FOUNDATION FOR SUCCESSFUL INTERNATIONAL EXPANSIONTAX STRUCTURE & STRATEGY

Implementing an efficient tax structure is a critical challenge in

any successful overseas expansion.

Without it, exposure to compliance penalties is heightened and the

profitable benefit from international markets is limited at best.

Understanding your tax obligations in your overseas

locations is paramount.

WHT is a tax levied by a fiscal authority on income sourced in their country – it is a means to

collect tax in-country.

It applies to dividends, interest and royalties when funds flow between related legal entities operating in

different countries.

WHT Liabilities may be reduced by:

A Double Tax Agreement (applicable in most situations)

WHT Liabilities may be reduced by:

A Double Tax Agreement (applicable in most situations)

Operation of specific local legislation in country

WHT Liabilities may be reduced by:

A Double Tax Agreement (applicable in most situations)

Operation of specific local legislation in country

Other mutual agreement (EU Parent / Subsidiary Directives

WHT Liabilities may be reduced by:

WHT is not necessarily an additional or absolute cost

— tax may just shift from one country to another.

But without planning ahead there could be a considerable

“tax leakage.”

72% of the companies we asked did not have a comprehensive WHT strategy or were just managing in an ad-hoc fashion.

72%

When setting up an overseas company, consider where it will be situated, how it will be funded, and what operations

it will be carrying out.

Structure overseas investments to minimize WHT exposure – use

holding companies and “tax favored” jurisdictions.

Plan for country-specific and “hidden” tax costs, which can be a considerable tax burden if not taken into consideration.

Stay Switched On. Simply knowing the

“federal tax rate” is not sufficient. State levies and special taxes can amount

to significant tax costs.

Never ignore compliance or litigation costs, and

submit the required documentation to avoid interest and penalties.

Consider tax benefits and exemptions:

Are they automatic?

Consider tax benefits and exemptions:

Are they automatic?

Are they subject to certain terms and conditions?

Consider tax benefits and exemptions:

Are they automatic?

Are they subject to certain terms and conditions?

Do the conditions fit with your business objectives?

Consider tax benefits and exemptions:

Only 8% of companies we asked have a comprehensive and

strategic tax structure.

A comprehensive tax structure and strategy is one of the foundations of any

international expansion operation ...

... and one of the most difficult challenges to take on.

Need help planning your international tax structure & strategy?

Connect with Radius:US: +1 888 881 6576 UK: +44 (0) 203 005 5518

[email protected]

Radius helps companies expand and win globally.

Need help planning your international tax structure & strategy?

Connect with Radius:US: +1 888 881 6576 UK: +44 (0) 203 005 5518

[email protected]

Radius helps companies expand and win globally.

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