Hi All,
One of my clients has been trading for 2 years and has now set up a company in Poland due to potential business opportunities, although they have yet to start trading.
Director owns the shares personally in each company rather than the UK company owning a share in the polish company. it's not something i have ever dealt with before and all sorts of problems come to mind such as VAT registration in Poland, transfer pricing between the company's, do i need to report the profits from Poland anywhere on the UK CT600 etc. along with hours researching every time they ask a question relating to it.
I have come to the decision/know its the right thing to do that i will disengage with the client and ask them to find another accountant who has more expertise and can advise them on this but just wanted to check (reassurance) that having a polish company would actually add problems as above - great client and great payer with a good fast growing business so would ideally not like to lose them but well aware of my abilities which do not include foreign entity companies so would rather they had the proper advice for their business.
Thanks in advance for any comments.
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Well (obviously) a Polish accountant is required.
If you don’t feel confident to continue to serve the client then fair play to you for not going outside your comfort zone.
If the Polish company has been set up as a separate entity (rather than a branch) then your accounting and tax won't change much.
They will need a local accountant in Poland to deal with the compliance.
If you don't speak Polish, ideally you would want them to choose someone who speaks English so you can discuss what is a fair value for transactions between the two entities and ascertain what work is being done where.
For our french cos, on the UK side, our main focus is on the interco balance, making sure they match and reviewing the overall group profits to make sure the UK/France split is reasonable. I wouldn't necessarily give the client up if you are happy to do this?
That said it does help to have someone with a broad understanding of the two systems to make sure the group approach is sensible/planned tax efficiently.