Below is a list of questions to ask yourself in order to help you plan.
We would still encourage you to speak to a professional about your specific circumstances as soon as possible – particularly if you have operations in more than one country.
What do I need to think about first?
- Do I have a complete understanding and list of every tax payment that needs to be made in the next 90 days? Corporate taxes, payroll taxes, social security, VAT, property taxes…the list needs to be as complete as possible.
- Where can I find out about any relaxations, deferrals or other mitigation options I might have in each country?
- Even if there are no COVID-19 exemptions, can tax instalments be reduced or eliminated if local tax rules allow a rebasing of instalments or payments based on a projected fall in income?
Is the cash in the right place?
- If my international offices need cash urgently, do I understand cash in the Group and what I can do to make sure it is available in the right country?
- If there are Group companies with distributable reserves, can dividends be paid to move cash?
- What are the corporate tax implications of any dividends? Will it be taxed upon the recipient?
- What are the withholding tax implications of any dividends?
- Do I understand the terms of any intra-group agreements in place? Do they allow prepayments (or similar) that will enable us to move cash around?
- Whatever I do, what are the Foreign Exchange risks? What does that mean for tax? Will I get relief for any losses made?
Beyond fire fighting
- Do I know whether any of my employees are stranded in the “wrong” country?
- Perhaps some European employees are working from home in a different EU State from where your office is located
- Maybe a Director is attending Board meetings online from their holiday home
- The global shutdown and travel restrictions could have all sorts of implications from Permanent Establishment creation to complicating your Head Office tax residency
- Do I understand what additional expenses employees might be able to claim from the Company in view of the increased home working?
- Do I understand what the likely impact on current year trading will be as a result of COVID-19? Will I be able to carry any losses made this year into an earlier accounting period to reclaim tax?
- Can I forecast the group balance sheet accurately? Do I understand the implications for transfer pricing and thin capitalisation of any actions I might plan to make between now and year end?
Our international network of local service providers in over 65 countries worldwide are available to help you answer many of these questions and structure a plan for the coming months. Please contact us to find out how we can help you.