Cross Border Taxation Advice

Very simply it’s when you have multiple business interests in different tax Jurisdictions some with more favourable taxation than others and you want to make sure you pay legally the least amount tax and do not have issues with another Jurisdiction.

A simple example of this would be a Real Estate Transaction conducted for a sale of a property in Malaysia and you are due commission and fees from the transaction. You decide to Invoice from your French company and receive the money in France therefore having no liability to pay Tax in Malaysia. Most people think this is completely tax efficient however as the actual business took place in Malaysia the Malaysian Tax Authorities may deems that they should receive some tax from the transaction. However, unless it’s a large amount of fees this is likely to go under the radar and you won’t pay tax even though you may have a liability to do so. The flipside to this is that you’re a UK Company providing advice to a Filipino company about an acquisition of a company in Malaysia here it is highly likely there would be no cross border tax liability when you invoice from your UK Company.

So as you can see it is very important to get the right cross border tax advice and the reality the higher your net worth and the bigger you are the more important it is for you to get the right advice.

Another example of this would be using favourable tax regimes like Labuan, Cayman Islands, Hong Kong or similar to own 100% a business in the Philippines thus mitigating a lot of tax, now depending where the holding company is based this would be a great idea or a very bad one.