UK Charities Operating Overseas - Tax Risks & Practical Compliance

Introduction

UK charities increasingly operate across borders, whether through overseas employees, contractors, branches, subsidiaries, investments, joint ventures, grant funding or other local operations. While a charity may be exempt from UK corporation tax on many sources of income, the overseas position may not be so straightforward.

This virtual classroom seminar will consider how even apparently small or informal overseas activities can create tax and compliance obligations, including situations where a charity has only a few employees or representatives in another country. It will also consider the practical challenges of managing tax compliance where a charity has activities in multiple jurisdictions.

The emphasis will be on practical risk management: identifying when overseas tax issues need to be addressed, when specialist advice or detailed analysis is justified and when relatively simple arrangements can be managed without unnecessary complexity.

The session focuses primarily on direct tax issues but will also consider other taxes such as VAT and employment tax.

The session is primarily aimed at small and medium-sized charities, focusing on practical issues likely to arise in organisations of this size. More specialised regimes primarily applicable to larger organisations, such as the Senior Accounting Officer regime and Pillar Two, will not be covered in detail.

It is ideal for accountants, tax advisers and charity finance professionals who advise on or manage overseas activities, together with charity lawyers seeking a practical understanding of the tax issues. No specialist international tax knowledge is assumed.

What You Will Learn

This live and interactive session will cover the following:

• Overseas presence, permanent establishments (PEs) and tax residence
• How a PE can arise through overseas offices, branches, dependent agents and workers
• How can a single overseas worker create a PE?
• Current OECD principles on PEs
• Can overseas activities affect the charity's tax residence?
• Allocating profits to an overseas PE
• Managing PE risks and compliance in practice
• Charitable reliefs, treaty benefits and withholding taxes
• UK vs overseas charitable exemptions/reliefs and local requirements
• Treaty benefits and supporting documentation
• Withholding taxes on payments, including interest, royalties and services
• Overseas subsidiaries and other entities
• Branches versus separate legal entities
• Funding overseas subsidiaries and local operations
• Intra-group payments, funding and distributions
• Local charitable exemptions and tax treatment
• Transfer pricing
• When transfer pricing rules can apply to charities
• Transactions with subsidiaries and branches
• Charging for staff, management, services and other resources
• Cost allocations and recharges
• When is detailed transfer pricing benchmarking needed?
• Practical approaches for operations in several countries
• Overseas investments
• Foreign withholding taxes on dividends, interest and other income
• Double taxation and foreign tax relief
• Practical issues when investing through overseas funds or structures
• Overseas grants and charitable expenditure
• Grants to overseas charities and organisations
• Tax and documentation issues when making payments overseas
• Practical due diligence and record-keeping considerations
• Managing small overseas operations
• Keeping track of different tax and compliance obligations
• When does a small local presence become a tax problem?
• Employees, contractors and other local representatives
• Basic VAT, employment tax and social security considerations
• Overseas registration and filing requirements

Recording of live sessions: Soon after the Learn Live session has taken place you will be able to go back and access the recording - should you wish to revisit the material discussed.