International tax planning, before the move.

International tax planning is the deliberate arrangement of where a business and its owners are resident, where its profit arises, and how value moves between jurisdictions. Done properly, it removes double taxation, avoids unintended permanent establishments, and keeps the group's effective rate consistent with where work genuinely happens. It is not a search for the lowest rate on a map.

The subject rests on a small number of recurring ideas: company and personal residence, permanent establishment, treaty networks, transfer pricing, and substance. Almost every cross border question a founder faces is some combination of those five, so it pays to understand how they interact before any jurisdiction is chosen.

A company is usually taxed in full where it is resident. For many countries, including the United Kingdom, company residence turns on where central management and control is exercised, which is a question about where directors genuinely take decisions, not where the company is incorporated. A company incorporated overseas but run from the founders' original country can remain taxable there in full.

The founders' own residence matters just as much. Individuals moving between countries are tested by domestic rules such as the Statutory Residence Test, and a change in the owner's position can change where the group's decisions are treated as made. Residence of the company and residence of the people behind it should be planned together, because they move together whether or not anyone intended them to.

A country can tax a foreign company's profit if the company carries on trade there through a permanent establishment: a fixed place of business, a dependent agent who concludes contracts, or in some cases construction or service activity lasting beyond a treaty threshold. A retained office, a founder habitually signing deals from the former country, or staff hired before the structure is ready can each create one.

Treaties limit this exposure, but only between countries that have one, and only for a company that can prove residence. The practical consequences are unglamorous: activity in a new country usually means registration, local filings and payroll before the first invoice, not after.

Double taxation treaties allocate taxing rights between two countries and usually reduce withholding tax on dividends, interest and royalties flowing between them. Treaty relief is claimed through the domestic system, and a company relying on it should be able to evidence residence with a certificate of residence when the counterparty or their bank asks for one.

Relief is not automatic. Anti treaty shopping rules, including principal purpose tests now common in modern treaties, deny benefits where obtaining them was one of the main purposes of an arrangement and the structure lacks commercial substance. The treaty network a destination offers is therefore part of the destination decision, not a detail for later.

Where a group operates through related companies in more than one country, transactions between them, for services, licences, goods or financing, must be priced as if between independent parties. Tax authorities on both sides test whether profit has been allocated to where functions are performed, risks are managed and assets are used.

The documentation expectation has grown alongside the rules. Groups above local thresholds prepare master file and local file reporting, and even below the thresholds an authority can ask why profit sits where it sits. Intra group agreements should exist in writing, match what actually happens, and be priced on a defensible basis from the start, because retrofitting them during an enquiry is where the cost escalates.

Moving profit or people between countries creates charges at the boundary. A company leaving the United Kingdom can face a deemed disposal of its assets, and individuals can meet the temporary non residence rules that pull gains back into charge. We cover the corporate side in our note on UK exit tax when relocating a business, and the founder side for US connected owners in our guide to moving a business abroad as a US owner, where the American reporting rules apply regardless of where the company sits.

Sequencing decides more than destination. Whether the founder moves first or the company does, whether contracts are novated before or after the accounting date, and how the last trading year is closed each change the outcome more than the choice between two otherwise similar jurisdictions.

Modern frameworks developed through the OECD's base erosion and profit shifting project require activity, people and expenditure to sit where profit is reported. Destination jurisdictions apply their own economic substance tests, and banks, registries and treaty partners apply the same instinct. A structure without substance is now the fastest route to an enquiry rather than a way to avoid one.

We explain how this is tested, and what evidence holds up, in our briefing on economic substance requirements, and how the choices look in practice for a UK owner forming a company offshore.

The line is drawn by purpose and evidence. Using a treaty relief, an allowance or a holding structure for the purposes it was designed for, with real activity behind it, is planning. Arrangements whose only genuine purpose is the tax result, profit booked where no one works, or positions that exist only in a pitch deck are avoidance, and disclosure regimes in most jurisdictions now surface them quickly.

In practice the safeguard is a written position: what the structure is, why it exists commercially, where the decisions are made, and what would be shown if it were examined. We put that in place as part of every engagement, and it is the reason our tax advisory practice treats planning, efficiency and technical consultancy as one thread rather than three products.