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Source Based Taxation
The earnings of non-resident taxpayers are only taxed in a country if there is sufficient “nexus” with the jurisdiction under source-based taxation, which permits authorities to tax the income of residents and non-residents alike. The following types of income are mainly affected by source-based taxation:
- Profits (including capital gains on the sale of business assets) of permanently established business: As a general rule, there is a self-imposed barrier to tax business activities happening within a particular jurisdiction. This is to ease and facilitate businesses to pay tax in the country where economic activity has occurred. Permanent establishment means carrying out the activity in question through a predetermined business location.
- Passive income payments (dividends, interest, and royalties) indicating locally derived profits received from resident to non-resident companies: These types of cross-border payments constitute income generated in the source country, and the rights to tax them, in whole or in part, are typically exercised through withholding taxation.
- Capital Gains from the sale of immovable property: Capital gains on immovable property are subject to tax in the country where the property is physically situated (the source country); however, capital gains on movable property, such as shares, are typically subject to tax in the country where the taxpayer is resident (residence country). However, because the line that divides moveable and immovable property is not easy to draw, taxpayers are usually taxed with the option of selecting the jurisdiction to pay tax, particularly capital gains.
Professional accounting bodies license accountants in the UK and elsewhere. These organizations provide both academic and practical training in accounting. Hire someone who has completed all the required examinations and has an accounting licence, whether for personal or business affairs.
Professional indemnity insurance (PII) is a contractual need for qualified accountants, and it protects both the accountant and the customers. If the accountant doesn’t follow your business interests or professional ethics, you may report them to their regulatory body. These are the top accounting institutions and their accompanying credentials in the UK.
- ACCA – Chartered Certified Accountant (ACCA or FCCA)
- Chartered Accountant (ICAEW) – (ACA or FCA)
- Chartered Management Accountant (CMA) (ACMA or FCMA)
- Chartered Accountants Ireland (CAI) (ACA or FCA)
- Institute of Financial Accountants (AFA, FFA)
Although some accountancy firms will offer you a ‘one-size-fits-all’ solution, most services are more flexible than this. Accountancy packages can vary in the services they provide. Although there are certain basic functions which most accountants will provide (and which are generally included in a monthly fee), there may also be additional services available for an extra fee. These extras usually include Self Assessment Tax Returns, Payroll and workplace pension compliance, Limited Company Accounts, Tax advice/planning, VAT Returns and MTD.
We are open for business and happy to accept your call. Our team of qualified accountants and tax consultants have broad skills and experience across all areas of accounting, taxation, tax planning, savings, and business investment which they utilise to the best of their abilities to help your company and achieve the best possible outcome for you. If you want to meet with us, we have a team of qualified personal tax accountants who can meet over the phone, via video call, or in one of our offices.
Perhaps it’s time to look for a new accountant if you haven’t enjoyed such kind of assistance from your existing one? Our accountants will work with you or your business to ensure that all elements of your finances are handled proactively so that you can refocus on what matters most – operating your business!
