Benefits of Corporate Tax Treaties in UK

Corporate Tax

Companies should pay corporate tax at the UK tax rate but knowing the country s corporate tax code takes time and effort. Begin with a simple introductory primer. If you are self-employed you will also need to pay corporate tax at the UK tax rate. If your business is domiciled in the UK and you use its building or premises for your business, you will have to pay tax at the UK rate on the profits from that use of the building or premises.

Types of Taxation Payable

There are two basic types of taxation payable by UK corporations: taxes based on assets and taxes based on income. Assets are tangible items such as land, buildings, and machinery. Capital assets are items such as accounts-receivable records, trade receivables, and securities. Income is any money a taxpayer receives or pays out within a year. The tax year begins with the accounting year and ends with the financial year. Corporations must report their income and assets annually in a financial statement prepared by an accountancy firm.

Free Registration

Every corporate citizen must register with the tax authorities so that the company will be required to pay tax at the appropriate rates. Registration is free and you can obtain all the necessary information online. The UK tax authorities issue several kinds of licenses that give the corporation the privilege to conduct business in certain specified circumstances. A UK tax treaty will explain which types of situations a corporation may be able to register.

UK Tax Authorities Issue

The UK tax authorities issue a corporation voluntary agreement or VAT Agreement to cover a variety of situations that affect corporate tax. The agreement covers all taxation issues between the corporation and the tax authorities, including transfer pricing and dividends. The corporate tax rate is the percentage of a corporation’s gross domestic product that is kept by its shareholders as profit. The lower the corporate tax rate, the more the corporation will profit. In other words, lower corporate tax rates mean larger profits for the shareholders.

Similar System of Taxation

Many countries around the world have a similar system of taxation. A tax treaty allows corporations to establish shop in another country. The tax rates are usually very low because the corporation is basically running a business from another country. Most countries allow businesses that operate in their territories to register in their territory and pay their taxes.

Kinds of Vehicles

There are many different kinds of vehicles, a company can use to enter into a tax treaty. These include share transactions, lease agreements, purchase agreements, mortgage payments, advances, and loans. Entering into a tax treaty is a much faster and less expensive process than filing an annual return.

Corporate Tax Attorney

A corporate tax attorney will handle all legal issues that arise during the course of a corporation’s business operations. This includes preparing all the necessary paperwork and undertaking the necessary negotiations with the government. The tax attorney will also work with the corporation’s shareholders to ensure that the corporation’s policies and programs do not violate any laws.


By having a corporate tax attorney on staff, a company can greatly reduce the chances of being audited by the Internal Revenue Service. In fact, the audits that a company may experience can be quite minor when compared to the billions of dollars in tax debts that American corporations are forced to repay every year. If a tax treaty is entered into properly, a corporation may even be able to avoid paying taxes for two years or more! All it takes is for the company to have proper internal controls in place. These controls will ensure that the corporation complies with all of the tax regulations that are in place.