Thank you very much for the info.Like I mentioned earlier a office is a fixed place of business and therefore a taxable presence is created. The Cyprus Entity would need to register
The standard setup would be setup a UK Subsidiary, register for PAYE with HMRC and give the employee a UK contact with salary and other benefits. UK company would pay corporate tax on any sale generated but with the tax much lower in Cyprus you can still have an agreement between UK And Cyprus company for management fees.
But it seems we don't have PE now because of:
1) We have an agent of independent status +
2) Our activities (leads generation and sales)whether conducted through a fixed place of business or by an agent, are ppreparatory or auxiliary in character in relation to the business as a whole.
Does it work in our case?
CTA2010/S1143 goes on to say that there is no permanent establishment in the UK if the activities here, whether conducted through a fixed place of business or by an agent, are preparatory or auxiliary in character in relation to the business as a whole. The statutory definition includes the activities that are listed as “activities of a preparatory or auxiliary character
e) the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character;
f) the maintenance of a fixed place of business solely for any combination of activities mentioned in subparagraphs a) to e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.’