UK In which country should the firm pay taxes?

[a2b]

Hello everyone,

I have a question regarding paying taxes.
"X" is a firm working in the credit industry in France. All its activities and employees are located in France.
"Y" is a firm located in the UK and has no employees elsewhere than in the UK.
X and Y have signed a contract where: Y will bring potential credit opportunities to X. Every time a credit ends up being done, X will give a commission equal to 1% of the total credit amount to Y.

Y has no employees in France and is only the middle man between customers in France, and company X. However, Y has no offices or employees in France, and only receives commissions from X on a UK company bank account.

Should it pay corporate tax in the UK or in France?

Best regards,

a2b

 

[pndaccountants]

The recent debate about tax avoidance by multinational firms like Amazon or Starbucks has brought corporate taxation to the top of the international policy agenda.

 

[Werner Reisacher]

The question is relatively easy to answer. Don't focus on employees, origin of funds, and location of bank account. Companies are legal entities and taxable at the place where they are registered. Whether the owner who is making the business decisions is a resident of another country is not important for the taxation of the legal entity, but might actually create a tax problem for the owner himself since his activities might have established a legal presence of that company he is controlling in his country of residence.