How do I proceed if my company is operating abroad and has to pay corporate tax?
November 4, 2023 | 40,00 EUR | answered by Ulrike Voigt
Dear Tax Advisor,
My name is Thomas Bergmann and I am the manager of a medium-sized company that operates internationally. In recent years, we have expanded our business internationally and are now active in several countries. Due to this expansion, we are faced with the challenge of paying corporation tax in the respective countries.
So far, we have only focused on tax obligations in Germany and are familiar with the regulations. However, tax laws abroad are largely unknown to us, and we are unsure of how to proceed.
Our concern is that we may have to pay taxes twice or that we may not be optimizing tax benefits. We want to ensure that we operate correctly and efficiently in each country to minimize financial risks and maintain our competitiveness.
Could you please explain to us what steps we need to take to pay corporation tax abroad? What particularities should we consider and how can we ensure that we are optimally positioned tax-wise? Are there ways to avoid double taxation and what tax benefits can we potentially take advantage of?
Thank you in advance for your support and advice.
Sincerely,
Thomas Bergmann
Dear Mr. Bergmann,
Thank you for your inquiry regarding corporate tax abroad. It is understandable that as a medium-sized company with international activities, you face the challenge of complying with tax regulations in different countries. To ensure that you operate tax-compliantly and efficiently, there are some steps to consider.
Firstly, it is important to familiarize yourself with the respective tax regulations in the countries where your company is active. Each country has its own provisions regarding corporate tax, which may differ in terms of tax rates, deadlines, and filing obligations. Therefore, it is advisable to consult a local tax advisor who can assist you in fulfilling your tax obligations.
To avoid double taxation, you should check whether there are double taxation agreements between Germany and the countries where your company operates. These agreements determine which country has the right to tax certain income and how double taxation can be avoided.
Furthermore, you can take advantage of tax benefits by reinvesting profits in countries with lower tax rates or benefiting from tax incentives for specific investments. It may also be beneficial to develop an international tax structure that allows you to optimize tax benefits and minimize risks.
Overall, it is advisable to create a comprehensive tax plan for your international business to ensure that you are optimally positioned for taxes and maintain your competitiveness. An experienced tax advisor can assist you in taking the right steps and leveraging the tax benefits available to you.
I hope this information is helpful to you and I am available for any further questions.
Best regards,
Ulrike Voigt
