How do I know if my cross-border structure still works?
Test it against the things that change: how each country classifies the entities, whether the treaty positions still hold, whether the substance matches the profit, whether every information return has actually been filed, and what it would cost to simplify. A structure is rarely wrong all at once. It goes out of date one assumption at a time, usually because a rule moved or the business did. The review is worth most before a sale, an audit or a wind-up, because those are the events that force the questions and remove your choice about timing.
What does a second opinion on a structure actually cover?
Five things. Classification in each country, because two administrations can treat the same entity differently. Treaty entitlement, tested as the counterparty country would test it. Substance, meaning whether the functions and people match the profit reported. Reporting completeness, entity by entity and form by form. And the cost of simplification, so that having fewer entities is priced rather than assumed away. The output is a written position on each of those, with the evidence behind it, rather than a list of things to worry about.
We have a dormant company abroad — does it still need filings?
Very often yes. Dormancy describes trading activity; it is not usually an exemption from filing. Registration, information returns and local company obligations tend to continue until the entity is formally wound up, and information returns are the ones that carry penalties per form. If nobody in the group has been looking at the entity, start by establishing what it was registered for and what has actually been filed, before deciding whether to keep it or remove it.
Should I review the structure before or after a sale?
Before. Most cross-border structures are examined for the first time when they are being sold, audited or unwound, and a review before any of those is the cheapest one available. During a sale the questions come from the other side's advisers, on their timetable, and every answer you cannot support becomes a price adjustment or an indemnity. The same findings surfaced a year earlier are simply work to be done. If a transaction is already running, the order of work changes: establish what you can support, then decide what to disclose.
Will a second opinion mean redoing the whole structure?
Usually not. Most reviews end with a small number of specific repairs and a decision about whether to simplify. The common findings are entities nobody needs and information returns nobody filed, and both have contained answers. Where the structure itself is sound, the output is a documented position you can stand behind, which is worth having in its own right. Where it is not, you get the cost of fixing it set against the cost of leaving it, which is the comparison that actually decides what happens next.
What are the most common problems found in these reviews?
Dormant entities and unfiled information returns, more than anything else. After those, the recurring themes are classification differences between two countries that nobody reconciled, treaty positions taken once and never re-tested, and substance that has drifted away from where the profit is reported as the business changed. None of these announce themselves. They surface when a buyer's adviser, an auditor or a liquidator asks for the file, which is why the timing of the review matters as much as its scope.
What happens if the two countries disagree about which of them can tax me?
The treaty has a procedure for exactly that. You apply to the competent authority in your residence country, which takes the case up with its counterpart, and the two negotiate a position that removes the double taxation. Some treaties add binding arbitration if they cannot agree. It is slow and it runs on documents, so the practical work is preserving the record and filing protective claims while the clock runs. See our treaty work.
Do I have to file in both countries?
Frequently yes, and the two filings do different jobs. The country where the income arises taxes it at source; the country where you are resident taxes your worldwide income and then gives credit for the tax already paid. Filing only one side is what leaves relief unclaimed — the credit has to be asked for on a return. We prepare both sides so the numbers agree. See dual filing.
