Holding company across borders — do I need an adviser, or can I do it alone?
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: Limitation-on-benefits provisions and principal-purpose tests ask whether the entity has substance and whether obtaining the benefit was a main purpose of the arrangement.
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.
Will my holding company still get treaty benefits?
Only if it can pass the anti-abuse provisions in the treaty concerned, and those were written specifically to find holding companies that exist for no reason beyond the rate. Two tests typically apply. A limitation-on-benefits provision asks objective questions about who owns the entity and what it does. A principal-purpose test asks whether obtaining the benefit was one of the main purposes of the arrangement. Both are applied to the facts as they stood at the time, so the answer depends on what the entity genuinely is rather than on what its constitutional documents permit it to be.
What does substance actually mean for a holding company?
People, decisions and function in the jurisdiction. Not a registered address, not a local director who signs what is sent to them, and not a bank account. The question a reviewer asks is where the decisions about the entity's assets are genuinely taken, by whom, and whether those people have the standing and the information to take them. That is answered by board papers, correspondence, travel records and the minutes of meetings that actually happened where they say they did. It is documented at the time or it is not documented, because reconstructing it afterwards persuades nobody.
Can I set up a holding company purely to reduce withholding tax?
You can incorporate it, but a principal-purpose test is designed to deny the benefit in exactly that case. If obtaining the treaty benefit was one of the main purposes of the arrangement, the relief can be refused even where every domestic formality has been observed. The workable version of this question is different: is there a commercial reason for the entity — holding and managing a group of investments, ring-fencing risk, providing a neutral platform for co-investors — that would survive without the tax advantage? If so, record that reasoning while it is current. If not, reconsider the structure.
Who has to prove why the structure was put in place?
In practice the burden falls on the taxpayer, because the taxpayer is the only party holding the evidence. The tests look at purpose and at substance, both of which are matters of fact known to the group and not to the authority. So the question is rarely settled by argument and almost always settled by documents — the business case prepared at the time, the minutes of the meeting at which the structure was approved, the instructions given to advisers, the record of who has since made decisions. Groups that have those answer quickly. Groups that do not, negotiate.
Our holding company has no employees — is that fatal?
Not necessarily fatal, but it is the first thing that will be asked about, and it puts the weight of the answer onto who takes the decisions and where. A holding company with few assets and a simple purpose may reasonably need very little activity, and the test is whether the functions the entity actually performs are performed there. What does not work is an entity with no staff whose decisions are demonstrably taken somewhere else. If that is the position, either move the decision-making genuinely or accept that the treaty position is exposed.
Do board meetings held in another country affect the structure?
They go directly to it. Where the board meets, and more importantly where the decisions are actually made, is evidence about both the entity's substance and its residence. Meetings minuted in one country but in fact conducted by people sitting in another, with papers prepared and conclusions reached elsewhere, are the pattern these tests are written to catch. The fix is not better minutes but a genuine change in practice, followed by records that describe what really happened. Decide how the company is to be run, run it that way, and let the documents follow.
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.
How does a remittance actually work, and is it taxed?
A remittance is a transfer of money, not a category of income, and moving your own funds between your own accounts is not what creates tax. What can create tax is the income behind the money and the rules of the country it leaves. India, for instance, collects tax at source when a resident individual remits abroad under the Liberalised Remittance Scheme, and requires certification before certain payments leave. The transfer is the trigger for paperwork rather than for tax. See the LRS and tax collected at source.
