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Tax residence certificates for UK undisclosed agencies

Horace Jefferson
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Joined: Wed Aug 06, 2008 3:33 pm

Postby Horace Jefferson » Thu Jan 12, 2006 9:42 am

I have a client which acts as undisclosed agency for a BVI company. The UK company (the agent) invoices in its own name on behalf of the BVI principal. The customers of the UK company are Italian.

An Italian customer requires a certificate of residency from the UK company.

Does anyone know the Revenue's position regarding certificates of residence for UK companies acting as undisclosed agent for a non-UK resident company?

Thank you.
Horace Jefferson

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Joined: Wed Aug 06, 2008 3:23 pm

Postby deanshepherd » Fri Jan 13, 2006 1:24 am

Obtaining a certificate of UK residence for an individual is easily obtained by a quick letter to HMRC but I have never had to do so for a company.

Surely the certificate of incorporation will show it is UK resident?

Either way, I am sure a letter to the Company's tax office will be sufficient to get confirmation.

Dean Shepherd
MMI Accountancy

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Joined: Wed Aug 06, 2008 3:31 pm

Postby hashman » Fri Jan 13, 2006 2:24 am

This is a fairly normal occurence in connection with claims to Double Tax Relief.

The point that then worries me is - are the Italian authorities being misled that they are dealing with a UK resident company rather than a company resident in a tax haven?

Horace Jefferson
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Joined: Wed Aug 06, 2008 3:33 pm

Postby Horace Jefferson » Fri Jan 13, 2006 3:54 am

Thank you for your comments.

Dean, yes the company is incorporated in the UK but don't you have to have your central management and control in the UK also to be UK resident for tax purposes? Also, there is something in tax bulletin 62 which talks about companies acting as agents not being able to obtain a residency certificate.

Hashman, the Italian company is dealing with the UK company as undisclosed agent for the BVI company. So yes, from their point of view, they are dealing with a UK company. But why is this a worry? The UK company takes commission from the sales and then passes the remainder on to the BVI company. Ignoring any transfer pricing issues, which have already been addressed, is there a problem obtaining a certificate of UK residency for this type of arrangement?

Thanks a lot.

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Joined: Wed Aug 06, 2008 2:19 pm

Postby Taxbar » Fri Jan 13, 2006 4:43 am

I think you should consider this position with the the help of a specialist.

Such structures were once considered sound; but following new money laundering laws are not considered so.

Undisclosed agency companies are also not liked by the HMRC.

The International division will look at them from a number of angles; one being transfer pricing.

If the structure is a vehicle to evade Italian tax and the money or commissions in the BVI are going to an Italian resident.
Then Money Laundering and the EU directives on co-operation in tax matters might be in point.

MARD could pose another problem, were the Italians to pursue the matter.

Consider carefully, your own position if you advise and assist with this structure.

Daniel Feingold

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