Practice guide: handling commissionaire structures

This article outlines how commissionaire structures operate and the tax risks which can arise from them.

Why use them?

Commissionaire structures are often used by UK companies for tax reasons for example:

• to avoid creating a permanent establishment if the UK company is making sales overseas; and
• to restrict the arm's-length profits taxable in overseas subsidiaries.

There are also non-tax reasons for using a commissionaire structure – for example to establish a local entity which can contract with employees or customers – but even in these cases avoiding incremental tax can...