Not sure if the question is structured correctly but here it goes.
I currently own 100% of an LLC in the UK and am exploring the possibility of turning it into an IT outsourcing company that will employ workers in Argentina. So, I will create a subsidiary in Argentina and with this structure, 100% of my invoices will be created in the UK and no money will actually be made in my subsidiary. This means that I will need to send money to the subsidiary to pay for the infrastructure and the salaries of the workers on a monthly basis. Does this qualify as a constant transfer price? In this company/business structure, is this a normal practice and not something that the HMRC will frown upon and want to slap me with fines?
I guess the main gist is: I will be invoicing here in the UK, paying corporate taxes here in the UK and then sending money to Argentina for the subsidiary expenses. Constantly. Am I stepping on any taxing/regulatory toes?
Replies (2)
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There is no such thing as an LLC in the UK. I believe it’s an American form of legal structure. If you don’t even know what type of legal entity you have you are at the very bottom of the learning curve.
Far from slapping you with fines, HMRC will be overjoyed that your UK entity is booking all the sales income but no costs.
What does the accountant to your UK entity have to say about your business model?