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Statutory audits + invoices for services from tax haven company

Posted: Thu Jan 10, 2019 10:31 am
by bilderberg
This question is linked to another question I've asked over on the VAT forum.

Quick bit of background: I work for a UK based VAT registered company with turnover in excess of £10M and therefore subject to statutory annual audit. The company is seeking to engage a marketing consultant to improve the business online marketing, lead generation, website, seo etc. The consultant that has been selected operates from a Seychelles LTD corporate entity, so a business outside the EU would provide services to a UK based business, B2B.

Since the monthly invoices for the consultancy services would come from a non EU domicile that is considered to be a tax haven jurisdiction, does this scenario pose any challenges or red flags with regards to our annual accounts or statutory audit status?

Are there any additional safeguards or steps we should take to ensure transparency and avoid creating any situation that might look suspicious, or potentially trigger our auditors, or set off a tax investigation of any sort?

Re: Statutory audits + invoices for services from tax haven company

Posted: Fri Jan 11, 2019 12:13 pm
by wamstax
Anything to do with opaque tax havens can put up a red flag. It would be impossible here to consider all the angles and just because there is a Seychelles 🇸🇨 connection doesn’t necessarily mean that you are dealing with a Seychelles entity. The fact you need to think about it tells a lot.

Re: Statutory audits + invoices for services from tax haven company

Posted: Sat Jan 12, 2019 7:15 am
by bilderberg
It wasn't entirely the tax haven status that was causing pause, our accountant doesnt seem to have much experience dealing with non-EU service invoices full stop, he's concerned about dealing with a US LLC entity as well which is not a tax haven by any means; the statutory audit aspect seems to be making everyone jittery about raising a flag simply for paying service invoices outside the EU - I dont really understand why but I am not an accountant and dont really know much at all about why a statutory audit should make things so difficult, but I am trying to accommodate their concerns hence why I thought to try asking for guidance amongst my better informed peers here :D

I dont necessarily see the problem if its a deal being made with a corporate entity for a clearly stipulated contract with performance measures that can be demonstrably proven as met. It makes sense to me that an individual consultant who lives overseas would prefer to use a low tax company - Gibraltar, Guernsey and Hong Kong all have minimal tax for offshore income, surely this in itself isnt something that would make an auditor throw a wobbly? :?