The UK has one of the most comprehensive Double Taxation Agreement (DTA) networks, with over 100 bilateral treaties between itself and other nations.
British entrepreneurs, therefore, have a unique advantage in the international market.
DTAs effectively prevent an individual from being taxed twice on the same income through a Government-to-Government treaty that decides which has the right to levy tax under certain conditions.
In other words, if you are making money in another country but are still a resident of the UK, the DTA between the two countries determines to whom your liabilities belong.
You can find a list of DTAs that the UK has in place on the Government website, but here are some of the most popular ones with UK entrepreneurs.
Australia
Australia has a robust economy and a strategic location that makes it a prime destination for UK entrepreneurs looking to tap into the Oceanic and Asian markets.
The DTA with the UK eases the tax burden on individual entrepreneurs and business owners whilst a competitive domestic market offers plenty of opportunities for investment and growth.
Many entrepreneurs talk highly about the numerous rebates from payroll, stamp, and land taxes that individual Australian states offer that could seriously offset your costs.
On top of this, it is hard to deny that Australia offers a great quality of living to expats.
United States
Arguably the most popular location for entrepreneurs across the world, the US’ huge domestic market and technological edge make it a no-brainer for business opportunities.
The DTA with the UK reduces tax liabilities on British entrepreneurs while employment credits, business credits and foreign tax credits mean a greater opportunity for investment and an improvement of your bottom line.
In addition, the US has a competitive Income Tax for individuals and a Corporate Income Tax of only 21 per cent (compared to 25 per cent in the UK).
Canada
Canada has close ties with the UK both economically and culturally including a DTA that goes back to 1978.
On top of this, the country offers several incentives for entrepreneurs like the Global Skills Strategy, the Scientific Research and Experimental Development Program and the Accelerated Investment Incentive.
France
As one of the UK’s closest neighbours and with its strong economy and strategic European location, France is a key player in the UK’s international business strategy as well as a popular location for British entrepreneurs.
As a result of Brexit, the relationship between France and the UK went through a brief period of uncertainty, so it is best to discuss your plans for a French expansion with a qualified international tax adviser.
New Zealand
On top of the DTA with the UK preventing double taxation, New Zealand offers a range of opportunities and benefits for international entrepreneurs.
These include:
- Research & Development (R&D) tax incentives that reduce business costs.
- Encouragement of foreign investment (under specific circumstances).
- A highly skilled and educated workforce.
Germany
Renowned for its engineering and manufacturing prowess, Germany offers significant advantages for UK businesses, bolstered by a DTA that has been strengthened by further legislation since Brexit.
The workforce in Germany is highly skilled and well educated with expertise in high-quality manufacturing of cars and other technologies.
The country also boasts one of the largest European domestic markets and great connections to both Eastern and Western Europe.
Poland
With its rapidly growing economy and strategic location in Central Europe, Poland is becoming a hotspot for UK investment, supported by favourable tax arrangements for entrepreneurs under a DTA that has been in force since 2006.
The Polish Government, keen to foster foreign investment in the country, has developed the Polish Investment Zone (PIZ) project which means that tax incentives are now available anywhere in the territory of Poland.
They are also offering R&D relief and a reduced tax rate for income derived from intellectual property.
What is the role of SMCO’s international tax advisers in your business expansion?
All the above locations have their benefits and drawbacks, but without help from one of our experts, it is hard to determine which is right for your business.
We have the expertise to advise you and your team on the best moves for your expansion based on your specific tax needs.
We can also reduce your tax liabilities through grants, credits, and reductions once you have set up shop in your exciting new country of enterprise.
