What makes law firms different from an ordinary filing?
Legal work is performed where the lawyer is, so an office or a seconded lawyer abroad can create a taxable presence, while trust and client-account signing authority creates personal reporting for the individuals. 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.
Do our lawyers travelling abroad for matters create a taxable presence?
They can. Legal services are performed where the lawyer is sitting, so a firm's presence abroad is a question of where its people work rather than what its letterhead says. Occasional travel to attend a hearing or a closing is usually not enough on its own. A pattern of sustained work in the same country for the same client, a lawyer based there for the length of a matter, or space the firm uses regularly all move the analysis. Because the test turns on duration and repetition, a firm that cannot say how many days its people spent where is not in a position to argue the point at all.
Does signing on a client trust account abroad have to be reported?
Often yes, and the obligation is usually personal rather than the firm's. Several countries require an individual with signing authority over a financial account held outside their own country to report it, whether or not the money is theirs. A partner or a practice manager who signs on a client trust account abroad can fall within that requirement simply by holding the authority. The reporting is informational rather than a charge to tax, but the penalties for not filing are what make it matter. The practical step is to list every account, identify every signatory, and settle the position person by person rather than assuming the firm's own filings cover it.
How should partnership profits be allocated when partners work in two countries?
The starting point is that profit is generally taxed where the work that produced it was performed, while partners are taxed on their shares where they are resident. Difficulty arises when the internal allocation follows seniority, origination or historic agreement rather than where the work was done, because a revenue authority looking at the firm's presence in its country will ask what profit is attributable to the activity carried on there. Two questions need reconciling: the commercial allocation among partners, and the geographic attribution of profit. They do not have to be identical, but the difference has to be explicable from the firm's own time and billing records.
Is a seconded lawyer in another country enough to create an office there?
A lawyer seconded abroad for the duration of a matter is one of the clearest ways a firm acquires a presence it did not intend. The question is not whether the firm has leased premises but whether it carries on its business there through a fixed place, or through personnel over a sustained period. A lawyer sitting in a client's offices for the length of a transaction, or working from a base in that country, can satisfy both descriptions. Decide the position before the secondment is agreed. The terms of the secondment, who directs the work and who bears the cost all affect the answer, and all are easier to set than to change.
Do we have to count the days our lawyers spend on matters overseas?
Yes, and it should be a routine record rather than something reconstructed when a question arises. Almost every rule that decides whether a firm or an individual becomes taxable in another country turns on presence over a period. Without a day record the firm cannot show it stayed inside a threshold, and in practice the burden falls on the taxpayer. A simple register kept alongside the matter file, recording who travelled, which country, which dates, on which matter and for which client, answers both the firm's question and each individual's. Firms that only start counting when a revenue authority asks generally find the earlier years are the ones they cannot evidence.
Why is our overseas partner taxed twice on the same partnership income?
Usually because the two countries characterise the partnership differently, or because relief was claimed in the wrong order. One country may treat the firm as transparent and tax the partner directly while the other taxes the entity, so the same profit sits in two systems with different taxpayers attached to it. Relief then depends on the treaty and on the credit each country gives for tax paid in the other, which has to be claimed on the right return, in the right year, by the right person. The remedy is almost always a coordinated pair of filings rather than an appeal in one country alone.
Can an accountant in one country file my return in another?
Yes, where they are authorised to represent you with that tax authority and the filing is done electronically. What matters is not where the adviser sits but whether they can lawfully act for you and are competent in both systems — a return prepared with no knowledge of the other country is where the relief gets missed. We file on both sides, from offices in India, the USA, Canada and the UAE. See how we work.
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.
