Hi All
What are the tax implications of UK company company trading( Selling products through retail locations) through branch in Spain?
Specifically regarding below ( UK company is VAT registered in UK)
Spanish VAT ( IVA I believe) position?
Corporation tax position in Spain?
Payroll taxes in Spain?
Many Thanks
UK company's branch office in Spain
3 posts • Page 1 of 1
UK company's branch office in Spain
by ainaedil on Mon Aug 22, 2011 12:41 pm
- ainaedil
- Posts: 44
- Joined: Tue Jul 27, 2010 4:24 pm
Re: UK company's branch office in Spain
by LJDG77 on Wed Sep 14, 2011 5:26 pm
Aina,
Please note that the branch is one of types of permanent establishment, according to the article 5.2.b) of the UK-Spain Double tax Treaty.
Thus, all profits attributable to the Spanish branch are taxable there. The branch as a permanent establishment is taxed similar to a company. However, only certain expenses are deductible.
From the Spanish VAT viewpoint, note that a permanent establishment is also obliged to comply with all formalities as a company. The same when dealing with payroll taxes.
The advantage of having a permanent establishment (a branch in this particular case) as opposed to set up a company is to benefit in the residence country of the company (UK) from the losses generated in the branch country, since in the remaining scenarios the difficulties when offsetting the losses lead to benefit from setting up a company.
Kind regards,
luisjdura@duraasesores.com
Please note that the branch is one of types of permanent establishment, according to the article 5.2.b) of the UK-Spain Double tax Treaty.
Thus, all profits attributable to the Spanish branch are taxable there. The branch as a permanent establishment is taxed similar to a company. However, only certain expenses are deductible.
From the Spanish VAT viewpoint, note that a permanent establishment is also obliged to comply with all formalities as a company. The same when dealing with payroll taxes.
The advantage of having a permanent establishment (a branch in this particular case) as opposed to set up a company is to benefit in the residence country of the company (UK) from the losses generated in the branch country, since in the remaining scenarios the difficulties when offsetting the losses lead to benefit from setting up a company.
Kind regards,
luisjdura@duraasesores.com
- LJDG77
- Posts: 25
- Joined: Wed Aug 06, 2008 3:53 pm
Re: UK company's branch office in Spain
by LJDG77 on Wed Sep 14, 2011 5:27 pm
Aina,
Please note that the branch is one of types of permanent establishment, according to the article 5.2.b) of the UK-Spain Double tax Treaty.
Thus, all profits attributable to the Spanish branch are taxable there. The branch as a permanent establishment is taxed similar to a company. However, only certain expenses are deductible.
From the Spanish VAT viewpoint, note that a permanent establishment is also obliged to comply with all formalities as a company. The same when dealing with payroll taxes.
The advantage of having a permanent establishment (a branch in this particular case) as opposed to set up a company is to benefit in the residence country of the company (UK) from the losses generated in the branch country, since in the remaining scenarios the difficulties when offsetting the losses lead to benefit from setting up a company.
Kind regards,
luisjdura@duraasesores.com
Please note that the branch is one of types of permanent establishment, according to the article 5.2.b) of the UK-Spain Double tax Treaty.
Thus, all profits attributable to the Spanish branch are taxable there. The branch as a permanent establishment is taxed similar to a company. However, only certain expenses are deductible.
From the Spanish VAT viewpoint, note that a permanent establishment is also obliged to comply with all formalities as a company. The same when dealing with payroll taxes.
The advantage of having a permanent establishment (a branch in this particular case) as opposed to set up a company is to benefit in the residence country of the company (UK) from the losses generated in the branch country, since in the remaining scenarios the difficulties when offsetting the losses lead to benefit from setting up a company.
Kind regards,
luisjdura@duraasesores.com
- LJDG77
- Posts: 25
- Joined: Wed Aug 06, 2008 3:53 pm
3 posts • Page 1 of 1
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