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  1. #11

    I live on CUK

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    Services are treated differently from goods.

    Plus in the UK (and a few other European countries) business people prudently save money out of earned income to ensure their limited companies can pay their taxes when demanded by the authorities. If you run a limited company you are actually breaking laws if you don't do this.
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  2. #12

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    Googled more, have read a lot, asked few accountants and then even HRMC guys. Seems like "UK- Polish double taxation agreement" is crucial to understand the topic...

    So, for anyone looking for this in future, short info:
    - read a lot about Dual residence
    - check if your country is listed on Tax treaties in force. Usually the content of a treaty for given country is published in english on HMRC site, and translation in given language on native government pages.

    Now specific to Poland (starting in 2007):
    - the tax treaty document in English link - full title is "UK/POLAND DOUBLE TAXATION CONVENTION"
    - the same tax treaty document in Polish - full title is "Konwencja między Rzecząpospolitą Polską a Zjednoczonym Królestwem Wielkiej Brytanii i Irlandii Północnej w sprawie unikania podwójnego opodatkowania"
    - simply saying, if you are polish native and you have polish company already established in Poland, the best way to do business is register NOTHING in UK, and do a "service export" to UK. You just issue usual VAT invoice - nothing else is needed. You may be a self-employed or ltd-like company in PL - it really doesn't matter, as long as you properly work in VAT (import from UE), you are dual resident or just not-yet-resident in UK

    Of course, there may be problems with agency/company you want to work for. They may be not informed enough and simply afraid of doing business with off-shores. But yet, you can always show them links, and ask them to consult HMRC directly or good accountant.

    Also the tax-treaty is working both ways, so also DOES work for UK companies contracting in Poland. But it also means, this is NOT a backdoor for off-shoring taxes (if someone tries to do that) because of country specific "dual residency" rules.

    Hope this will help someone
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  3. #13

    Double Godlike!

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    I'd imagine that after 183 days in UK you'd be tax resident and liable for UK tax, just like I will be for Irish tax in a few weeks....

  4. #14

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    After 183 you'll become tax resident. Also there are other "positive tests" for becoming UK tax resident - as HMRC document specifically says...

    But at that moment you become a "dual resident" and the agreement between countries you are resident classified says what to do then. Don't know how that works for Ireland - someone need to read that treaty for UK/IRL to know...

    For POL/UK agreement look for article #4 titled "residence", then for article #7 "Business profits".
    Crucial is:
    "The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein"
    and according to "Permanent establishment" definition - simply doing services is not "Permanent establishment".

    Hope this clarifies residency/183 days etc.
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  5. #15

    Double Godlike!

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    Quote Originally Posted by yosheeck View Post
    After 183 you'll become tax resident. Also there are other "positive tests" for becoming UK tax resident - as HMRC document specifically says...

    But at that moment you become a "dual resident" and the agreement between countries you are resident classified says what to do then. Don't know how that works for Ireland - someone need to read that treaty for UK/IRL to know...

    For POL/UK agreement look for article #4 titled "residence", then for article #7 "Business profits".
    Crucial is:
    "The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein"
    and according to "Permanent establishment" definition - simply doing services is not "Permanent establishment".

    Hope this clarifies residency/183 days etc.
    Just need to be careful as the definition is rather woolly, i.e. it is possible to have a Permanent Establishment that is of short duration.

    Just pointing that out as you are always at the discretion of the tax authority.

    Best to get advice from a local accountant and get it agreed with HMRC, rather than keep quiet about it and hope you read it correctly.

    I would advise generally against interpreting tax law based on opinions from non-experts in a forum.
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  6. #16

    Nervous Newbie


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    Quote Originally Posted by BlasterBates View Post
    Just need to be careful as the definition is rather woolly, i.e. it is possible to have a Permanent Establishment that is of short duration.

    Just pointing that out as you are always at the discretion of the tax authority.

    Best to get advice from a local accountant and get it agreed with HMRC, rather than keep quiet about it and hope you read it correctly.

    I would advise generally against interpreting tax law based on opinions from non-experts in a forum.
    Yes, you are definitely right. No one should use that without detailed analysis. And also - I'm non-expert.

    I just confirmed this info with 2 accountants - but you can never be sure if they know what they are doing, or just telling me what I want to hear. So anyone using this info should be careful and double-check everything.

    I simply want to confirm that everything is OK with this approach...
    So my question to you (or anyone else able to answer):

    How to ask question directly to HMRC ?
    What way of doing that you people prefer ?
    Should I mail them ? Ask with official document ? Or just ask directly in the local office ?

    Thanks for ideas...
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  7. #17

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    Default Who will you be invoicing

    Quote Originally Posted by yosheeck View Post
    if you are polish native and you have polish company already established in Poland, the best way to do business is register NOTHING in UK, and do a "service export" to UK. You just issue usual VAT invoice - nothing else is needed. You may be a self-employed or ltd-like company in PL - it really doesn't matter, as long as you properly work in VAT (import from UE), you are dual resident or just not-yet-resident in UK

    Hope this will help someone
    This depends on who you are invoicing

    If your Polish company is invoicing the end client or you need to invoice an employment agency

    Invoicing a client or an agency is not the same thing

    If you need to invoice the agency you will most likely need either a UK LTD company or an umbrella company as they need proof that you are paying UK tax as you will be working for the end client of the agency

  8. #18
    dlv
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    Quote Originally Posted by yosheeck View Post
    After 183 you'll become tax resident. Also there are other "positive tests" for becoming UK tax resident - as HMRC document specifically says...

    But at that moment you become a "dual resident" and the agreement between countries you are resident classified says what to do then. Don't know how that works for Ireland - someone need to read that treaty for UK/IRL to know...

    For POL/UK agreement look for article #4 titled "residence", then for article #7 "Business profits".
    Crucial is:
    "The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein"
    and according to "Permanent establishment" definition - simply doing services is not "Permanent establishment".

    Hope this clarifies residency/183 days etc.
    Just one thing here. Article 5, point 5 says:

    "Notwithstanding the provisions of paragraphs (1) and (2) of this Article,
    where a person – other than an agent of an independent status to whom paragraph (6)
    of this Article applies – is acting on behalf of an enterprise and has, and habitually
    exercises, in a Contracting State an authority to conclude contracts on behalf of the
    enterprise, that enterprise shall be deemed to have a permanent establishment in that
    State in respect of any activities which that person undertakes for the enterprise,
    unless the activities of such person are limited to those mentioned in paragraph (4) of
    this Article which, if exercised through a fixed place of business, would not make this
    fixed place of business a permanent establishment under the provisions of that
    paragraph"

    which basically would mean that you're deemed to have a permanent establishment even if you don't explicitly set it up here.

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