UK company with a branch in UAE

Do profit/expenses in UAE need to be shown in accounts and tax returns filed in UK?

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Hi, 

A UK registered company has a branch and a bank account in UAE and is considered to be managed outside the UK for the purpose of the activities of the UAE branch, as the main decision maker is not a UK resident. It pays corporation tax in UAE. Does it have to show the income/expenses of the UAE branch in the accounts and tax return that are filed in the UK?

Thanks!

Replies (10)

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By graemeban123
15th Apr 2024 09:40

Ask your accountant.

If you are the external accountant I would suggest you consider resigning as you clearly do not have the relevant technical knowledge / skill set to be dealing with this client.

It could save you a lot of potential future time dealing with potential claims, also I hope you have your Professional Indemnity Insurance in place and it covers you for the area your clients branch is based, if not could be extremely expensive for any errors you make.

If you are a trainee / junior in a large firm which does have the relevant skill base just ask the appropriate senior individual rather than some randoms online. I am sure your senior will be happy you are asking questions rather than making potential mistakes.

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By taxdigital
15th Apr 2024 10:02

It appears from your previous questions that you need AWeb to help you out with business affairs in Russia, Ukraine, BVi, UAE ............ As a member of the public I would think that you shouldn't be providing accountancy services to the public as a broadband connection and a software subscription won't be enough to provide these services.

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By paul.benny
15th Apr 2024 14:06

+1 to graeme's comments.

The answer to your question is yes, though.

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Replying to paul.benny:
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By FactChecker
15th Apr 2024 17:44

I'd have said probably (rather than a categoric, yes) if pushed for an 'answer'.

But that's because we've been told little - and even less of it makes sense:
"A UK registered company has a branch and a bank account in UAE and is considered to be managed outside the UK for the purpose of the activities of the UAE branch, as the main decision maker is not a UK resident."
- is the UAE business really a branch of the UK company, or a JV or something else?
- WHO has decided that they have 'considered it to be managed outside the UK'?
- and what is OP's role in all this (previous posts refer to friends not clients, and there's little evidence of accounting knowledge in UK let alone overseas)?

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Replying to FactChecker:
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By Nick10
16th Apr 2024 06:47

Thanks for your responses and apologies for not responding to your questions. I have responded below and btw not looking to rely on this for professional advice.

- is the UAE business really a branch of the UK company, or a JV or something else? It is a branch with an office and a bank account in the UAE
- WHO has decided that they have 'considered it to be managed outside the UK'? This is the working assumption to make things easier as the assessment can be quite complex. To provide more detail, there is one employee of the company who is UK resident and none of the shareholders or the director are. PSC is a shareholder who is not a UK resident.
- and what is OP's role in all this (previous posts refer to friends not clients, and there's little evidence of accounting knowledge in UK let alone overseas)? It is a friend asking me a question and I want to help her if I can.

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Replying to Nick10:
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By paul.benny
16th Apr 2024 08:29

Nick10 wrote:
...It is a friend asking me a question and I want to help her if I can...

With every respect, the best advice you can give your friend is to tell her rely on her professional advisers. And if they can't help, she should get new advisers.

I know from experience that establishing a branch in UAE is not simple and requires local advisers - presumably they are already in place.

From an accounting perspective, it makes no difference whether a branch is in UAE or Uxbridge - a line by line consolidation is required.

As regards tax, UAE CT only takes effect from periods starting after 1 June(?) 2023. I've no idea whether there is a double tax treaty with UK. Nor from the briefest of research how the introductory basis period is determined, or how taxable and accounting profits differ. And so on.

Even though I've experience with a branch in UAE, I know just about enough to know when I need to seek proper expertise.

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By Nick10
15th Apr 2024 20:26

Are you analysing me or responding to the question? I think we can all agree that it is a waste of your, my and everyone else's time to write/read comments that do not provide a response. It's better not to respond at all. All the best.

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Replying to Nick10:
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By FactChecker
15th Apr 2024 20:41

If you want to insult people then it might be an idea to indicate at whom you are casting unwarranted and pompous 'instructions'.

FWIW it's certainly a "waste of your, my and everyone else's time" to post ludicrous questions that are incapable of receiving a professional answer (that you probably won't like anyway).
But if you think you really are deserving of a reliable answer, then put your money in at least the same vicinity as your mouth ... and appoint a paid for professional advisor.

BTW, I and others may not have fallen into the trap of giving you meaningless 'answers' to your question ... but nor have you deigned to answer the perfectly relevant ones asked by me above.

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By Paul Crowley
15th Apr 2024 21:55

You already have two yes comments.
Why get antagonistic if extra matters are considered?
All questions stay live for the benefit of the community. Any answers are for the permanent benefit of the community, not just the person asking.

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By Tax Dragon
16th Apr 2024 05:55

If you want to establish the correct answer, rather than just an answer, you will need at a minimum to know/be aware of s14 CTA 2009, s18 CTA 2009 and the terms of any treaty or treaties between the UK and other countries with which the company in question has connections - and of course know enough about the company (and the domestic law in those other countries) to be able to apply that knowledge/awareness.

Respondents here satisfy (to varying degrees) the requirements up to the hyphen. They obviously cannot satisfy the requirements after the hyphen. It follows that no answer here can be relied upon.

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