From the course: Understanding UK Business Finance and Tax
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UK companies trading overseas taxes
From the course: Understanding UK Business Finance and Tax
UK companies trading overseas taxes
Have you ever wondered how multinational companies such as Microsoft or Toyota pay tax on their U.K. based operations? In this video, I'm going to explain how the operations of multinational conglomerates are taxed in the U.K. and which operations are taxed overseas. Company will pay U.K. tax if it has what is referred to as a permanent establishment in the U.K., and the economic activity from which it generates profits is in the U.K. This means that if a U.K. company makes sales to overseas customers, the profit from those sales is taxed in the U.K. However, if it sets up a branch overseas, the profits from that branch are taxed abroad and not in the U.K. The same applies to a foreign company. If it simply sells goods or services to U.K.-based customers, it is not subject to U.K. tax. However, if it sets up a shop in the U.K., then any profits from that shop are taxed in the U.K. If the foreign company uses a dependent agent to effectively run the business on its behalf in the U.K.…
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