Does supervising construction abroad make my practice taxable there?
It is far more likely to than design work carried out at your own premises. Site supervision puts your people in the project's country, at a fixed location, for as long as the phase lasts, and that is the fact pattern a permanent establishment test is built to catch. Design work done at home has none of those features. So one appointment can sit outside the project country's reach during the first phase and inside it during the next, with no change to the contract. Look at the supervision phase on its own terms before it starts, not at the appointment as one undivided service.
We design here and build there. Where is our fee taxed?
Follow the work rather than the invoice. A single fee covering design and site supervision is doing two different things for tax, and the project country's claim is strongest over the part earned by people present there. If the appointment does not split the fee, somebody else will split it later, either that country's revenue authority or your home country when it assesses a relief claim, and their split will not be built from your records. Set the allocation out in the appointment, support it with the fee proposal and the resourcing plan, and record time by phase so the split can be evidenced.
The project country withheld tax on our fees. Can we recover it?
It depends on whether that country had the right to tax the fee at all. Where the treaty leaves the fee outside its reach, or reduces the rate, the route is a claim in that country, supported by a residence certificate and the contract. Where it did hold a taxing right, which supervision on site often gives it, the tax is not recoverable there and belongs instead as a credit against home-country tax on the same profit. Most failed recoveries fail on paperwork: the withholding certificates were never collected from the client while the project was still live.
Is site supervision treated differently from design for tax purposes?
Yes, and that distinction carries most of the answer for a practice working across borders. Design is a service you can perform from your own premises, leaving nothing behind in the project's country. Supervision puts staff on a site for a sustained period, which is what creates a taxable presence for the practice and, often, a local reporting duty for the people posted there. Building and installation projects also have their own treatment in many treaties. Before you accept a supervision scope, identify which article the project country will apply to it, because that decides whether the fee carries a local filing.
My residency changed mid-project. Should the fee split be revisited?
Yes, and it rarely is. The practice's exposure in the project country and the principal's own residency are separate questions, but the second changes who taxes the practice's profits and which treaty applies to the fee. A split agreed while you were resident in one country may allocate income to a place with no remaining claim on you, or ignore one that now has a claim. Revisit the appointment, the fee allocation and the invoicing entity at the point the residency changes, and record the date. Reconstructing when it happened, from memory, three years later is the harder exercise.
Do we need to register abroad if we only visit the site?
Occasional visits and a supervision posting are different things, and registration usually follows the second. The question to answer is what your people do in that country and for how long: attending a monthly progress meeting is not the same as stationing an architect on site through construction. Withholding on your fee can also create obligations of its own, independent of whether the practice has a presence. Decide the point at which the practice would register before the project reaches it, so the choice is made against a plan rather than discovered in a demand.
Do I get credit for all of the foreign tax I paid?
Only up to your own country's tax on that same income, and only for tax you were legally obliged to pay. Two consequences follow. Living somewhere that taxes you more heavily than your residence country does leaves an excess that becomes a carryover rather than a refund. And withholding suffered above the treaty rate is not creditable — the route back to that money is a refund claim in the country that took it. See claiming the credit.
Is double taxation illegal?
It is legal. Two countries can each have a valid claim on the same income — one because the income arose there, the other because you live there — and nothing prohibits both from exercising it. What exists instead is relief: tax treaties allocate the claim, and domestic law gives a credit for foreign tax paid. The relief is not automatic, though. It is claimed on a return, and unclaimed relief is simply lost. See how double taxation is relieved.
