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Transfer pricing question. I am sole Director of a UK company

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Transfer pricing question. I am sole Director of a UK company (set up in 2009) and a UAE company (newly set up). I provide business consultancy services. I live in the UAE. Some of the companies I work with would prefer to contract with the established UK company that has history. The problem is all business development cost has been out of the UAE. For the project I tend to use contractors to work with me. I can get the contractors to invoice the UK company directly, but how do I account for my time. (The contract fee is calculated based on daily rate)
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.

Hello, I'm Keith and happy to help you with your question.

 

However, I am having a bit of difficulty as to what you are actually getting at! I can understand companies wishing to contract with a UK company, but don't quite follow about 'how do I account for my time?' Presumably you wish to pass all business through your UAE company for convenience. In that case just invoice the UK company from the UAE company for the sums involved thus passing the moneys from the UK company to the UAE company. Your only costs would be the overseas transfer fees, so inflate your invoices to those organisations preferring to use a UK company to cover the additional costs incurred or bear the cost yourself. By this method the UK company will make minimal profits for UK Corporation Tax and all moneys will be available to the UAE company.

 

I do I have helped throw some light on how matters might be handled.

Customer: replied 3 years ago.
I was under the understanding the because I am the Director of both firms that could be deemed to be tax avoidance and that transfer pricing would apply. How do I apply that exactly.
Expert:  bigduckontax replied 3 years ago.
I do not think that likely. After all the big boys like Amazon and Vodafone do it on highly spurious grounds to transfer profits into tax havens. The invoicing system I have suggested is perfectly honest. It would have been invoiced by the UAE company had customers been willing to accept an invoice from an overseas company. You are merely transferring funds to where they ought to be and have evidence to support this should there be an enquiry.
bigduckontax, Accountant
Category: Tax
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Expert:  bigduckontax replied 3 years ago.
Thank you for your support.

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