Directors need to monitor carefully their location when making board meeting decisions to avoid an unintended taxable presence during the current lockdowns, say Stuart Sinclair and Serena Lee of law firm Akin Gump
With a number of territories moving into aggressive suppression phases to halt the acceleration of the spread of covid-19, including lockdown measures and restrictions on international travel, it has become increasingly important to monitor the approach taken to decision-making activities.
This includes those taken by businesses, their directors and employees to minimise the risk of creating an unintended taxable presence outside a company’s jurisdiction of tax residence.
A company will generally be tax resident in the UK if it is incorporated in the UK or if its place of central management and control is in the UK. However, this treatment may be displaced by the terms of a double tax treaty that the UK has entered into if it contains a ‘tie-breaker’ article.
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