UK companies investing in the US will normally seek to avoid a permanent establishment as US tax rates are normally higher than UK rates. Even where there is no permanent establishment, care should be taken that benefits under the UK/US double tax treaty are available, and that withholding taxes on income are therefore reduced. If a subsidiary is formed, this may be treated as a branch for US tax purposes, and consequently a more complex tax treatment arises in both the UK and the US.
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
UK companies investing in the US will normally seek to avoid a permanent establishment as US tax rates are normally higher than UK rates. Even where there is no permanent establishment, care should be taken that benefits under the UK/US double tax treaty are available, and that withholding taxes on income are therefore reduced. If a subsidiary is formed, this may be treated as a branch for US tax purposes, and consequently a more complex tax treatment arises in both the UK and the US.
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes: