Foreign affiliate structure review — can I handle this myself?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: the review maps ownership, classification in each country, surplus and income character, and the reporting each entity attracts.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
Do we have to keep filing for a dormant foreign subsidiary?
Generally yes, for as long as it exists. Reporting for foreign affiliates attaches to ownership rather than to activity, so an entity that does nothing still attracts the same returns as one that trades, and the exposure for not filing them attaches per form, per year, per entity. That is what makes dormancy expensive rather than free. The answer is usually to wind the entity up, but that is a step with consequences of its own, so the cost of keeping it and the cost of removing it have to be compared rather than assumed.
How do we wind up a foreign subsidiary we no longer use?
Treat it as a transaction, not an administrative task. A liquidation or a share transfer is a disposal, so the first question is what the entity holds and what its accumulated position is, in both countries. Then comes the order: intercompany balances settled, assets moved to whoever should hold them, filings brought current for the years still open, and only then dissolution. Entities struck off with balances outstanding or returns unfiled leave the exposure with the group rather than ending it, which is the usual way these exercises go wrong.
What does a foreign affiliate structure review actually cover?
Four layers, in order. Ownership as it stands on the registers, which is often not what the organisation chart says. How each entity is classified in each country that cares, because the answers can differ. The character of the income and the accumulated position of each entity, which determines what happens when money moves. And the reporting each entity attracts, entity by entity and country by country. The output is a map plus a shortlist: the entities that earn their keep, the ones that do not, and what removing them would involve.
Profits have built up in our overseas company, so how do we bring them home?
Start with what the accumulated profits are made of, because the character of the income determines how a distribution is treated when it arrives. Profits from an active business are not treated the same way as passive income, and tax already paid abroad may or may not produce relief depending on that character and on the route the money takes. The order of steps matters too, since settling intercompany balances, repaying capital and paying a dividend are different events. Plan it before anything is paid, because once cash has moved the options narrow.
Can the same company be treated differently in two countries?
Yes, and it is one of the commonest findings in a structure review. Each country applies its own rules to decide whether an entity is a company in its own right or is looked through to its owners. Where the answers differ, income can be taxed in different hands, or at different times, and relief for tax paid in one country then fails to line up with the income recognised in the other. The mismatch is usually invisible until money moves, which is why classification is checked before a distribution rather than after one.
Our intercompany agreements do not match what the entities do, so does it matter?
It matters most at the moments you do not control: an audit, a sale, or a distribution. Profit has been allocated between countries on the terms of those agreements, so if they describe functions nobody performs, every year allocated on that basis is arguable in more than one place at once. Fixing it forward is straightforward, since you describe what the entities actually do and set the terms to match from a defined date. The years already filed are a separate exercise, and how far back to go depends on which remain open.
What is a permanent establishment, and how easily do we create one?
A taxable presence in another country under the treaty — typically a fixed place of business such as an office, branch, factory or workshop, or a dependent agent habitually concluding contracts on your behalf. Some treaties add a services test measured in days. Purely preparatory or auxiliary activity is excluded, but that carve-out is narrower than it sounds: one senior employee working from home in the other country, with authority, has been enough. See business profits and permanent establishment.
Do I pay tax twice on a foreign dividend?
Not at full rates if the relief is claimed. The paying country usually withholds at source, capped by treaty where one applies and the paperwork is in place; your residence country then taxes the dividend and credits the foreign withholding against its own charge. Where the withholding exceeded the treaty rate because no declaration was filed, the excess is recovered from the paying country, not credited at home. See the dividends article.
