What makes architecture practices different from an ordinary filing?
Design fees earned remotely and supervision fees earned on site are treated differently, and the second is far more likely to create a taxable presence in the project country. An ordinary preparer applies the general rule and stops there, which is how the relief in the specific provision goes unclaimed.
Can you work with my existing accountant?
That is how most of these engagements run. They keep the domestic file, we take the cross-border piece, and the boundary is agreed in writing so nothing is done twice or missed.
We design here and supervise on site abroad, does that change our tax?
It can change it a great deal, and it is worth keeping the two activities apart in the paperwork. Design work carried out in your own studio is generally taxed where the practice is. Supervision performed at the project site is activity in that country, done by your people, over a period, and that is precisely the pattern that can make the practice taxable there on the profits attributable to it. The distinction is factual, about where the work happened, so the record of who was on site and for how long becomes an important document.
Should we split the design and supervision fee on one invoice?
In our experience yes, and preferably in the appointment rather than the invoice. A single fee for a single deliverable invites the project country to look at the whole of it, because nothing in the paperwork identifies the part earned elsewhere. Splitting the scope and the fee between design and site services, each priced on its own terms, gives you a documented basis for saying how much relates to activity in that country. It has to be honest and it has to match what actually happened, or it does more harm than the single invoice did.
Our foreign fees have tax deducted at source, can we get it back?
Often some of it, by two different routes. The first is the rate itself: the treaty between the two countries may cap the deduction below the domestic rate, and that is usually claimed by giving the payer proper residence documentation before payment rather than afterwards. The second is relief at home for tax properly suffered abroad, claimed on your own return with the deduction evidenced. Practices that have never recovered any of it are usually missing the certificates on one side and the evidence on the other. Both are retrievable up to a point.
How long can our staff work on a project site before it becomes a problem?
There is a threshold in most treaties, it is measured in time spent, and it differs from country to country, so the answer for your project comes from reading the right treaty rather than applying a general rule. What is constant is the need to count. Days on site, by person, by project, recorded as they happen. Practices that reconstruct the count afterwards from flight bookings and memory are the ones who lose the argument, whichever side of the threshold they were actually on.
Does a site office for one project make us taxable in that country?
It points strongly in that direction, though it is not decided by the sign on the door. What matters is whether the practice has a fixed place at its disposal in that country through which it carries on business, and for how long. A desk provided by the client and used by your staff for months can meet that description even though you never signed a lease. The supervision phase is where this usually arises, which is why the question is worth asking before the appointment is signed rather than after the first site visit.
We invoice from here and the client withholds anyway, is that correct?
It may well be correct, because the deduction usually depends on where the services were performed and on the payer's own obligations, not on where the invoice was raised. Issuing from the home office does not take the fee outside the project country's rules. The useful questions are whether the rate applied is the one the treaty allows, whether the deduction has been evidenced properly so you can claim relief for it, and whether the split between design and site services was documented in a way the payer could act on.
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.
What is double tax relief and how is it given?
Three mechanisms, and which one you get depends on your residence country's law and the treaty. Exemption leaves the foreign income out of the residence-country base. Credit taxes it and then subtracts the foreign tax, capped at the residence-country tax on that income. Deduction merely reduces taxable income by the foreign tax, and is usually the weakest. Canada and the United States lead with credit; several treaties give exemption for specific income types. See claiming the credit.
